Economics

Question 1

The marginal propensity to consume is a measurement of how much consumption changes compared to how much ______________ changes.

Answer 1

Disposable income

Question 2

As your income rises, you begin to spend more on clothes. This is an example of:

A. Allocative efficiency
B. Marginal propensity to consume
C. Compensating differential
D. Marginal propensity to save

Answer 2

Marginal propensity to consume

Question 3

A student buys a candy bar at lunch. The decision to buy a second candy bar relates to the concept of:

A. Equilibrium pricing
B. Surplus
C. Utility
D. Substituability

Answer 3

C. Utility

Question 4

______ is the measurement of happiness or satisfaction a person receives from consuming a good or service.

A. Equilibrium pricing
B. Surplus
C. Utility
D. Substituability

Answer 4

Utility

Question 5

What type of competition provides identical products?

Answer 5

Perfect

Question 6

What type of competition provides similar but not identical products?

Answer 6

Monopolistic

Question 7

_______________ involves changing the interest rate and influencing the money supply.

Answer 7

Monetary policy

Question 8

__________policy involves the government changing tax rates and levels of government spending to influence aggregate demand in the economy.

Answer 8

Fiscal