Quiz 12 Questions with Answer Key - Introduction to Economics | ECON 101, Quizzes of Economics

Download Quiz 12 Questions with Answer Key - Introduction to Economics | ECON 101 and more Quizzes Economics in PDF only on Docsity! EC101 Byrns —_Legibly enter all required information on a Scantron sheet. Quiz 12 . Aggregate Expenditures and Gross Domestic Product (GDP) would not be directly increased by an increase in: (a) household consumption. (b) business investment. (household saving. (d) government spending. (e) net exports [X-M]. . The sum of planned consumption, planned investment, government spending, and net exports [i.e., C +1 + G+ [X-M]] is known as: (a) classical macroeconomics. (b) aggregate supply. (c) fiscal policy (a) aggregate expenditures, and is roughly related to aggregate demand. - For purposes of GDP accounting, the winnings of a gambler who bets on illegal dog fights and takes money by cheating suckers in back room poker games would be included in: (a) wage and salary income. (b) income from Pproprietorships and partnerships. (c) consumption expenditures, (d) retained earings (@) none of these because the income is earned illegally. . Likely possible catalysts for unexpectedly rapid short-run bursts of inflation would not include (3) the U.S. bombing of Libya that caused higher prices for oil. (b) Hurricane Teddy destroying the gulf coast from Florida to Texas. (c) a recession caused by aggressive cuts in federal spending. (d) anxiety among young couples that if they don’t buy houses soon, rising interest rates may soon make mortgages unaffordable. (d) a blight that destroyed half of this year’s corn crop. . Philip Cagan, an expert on the effects of price level changes, identified periods during which average Prices rose so rapidly that most people largely quit using money, instead reverting to barter, a tances of: (a) accelerating inflation. (b) galloping inflation. (c) stagflation. (d) catastrophic inflation, hyperinflation. . Professor Greenthumb’s family makes pickles from cucumbers grown on the roof of their Chicago condominium, The value of these pickles is excluded from calculations of: (a) measured GDP to avoid double counting. (b) economic GDP because it involves an intermediate good. (c) measured GDP because it reflects agricultural production. (d) measured GDP because do-it-yourself production cannot be estimated accurately but, conceptually, the value is economic GDP. (©) economic GDP if the Greenthumbs also own and operate a farm, but it would be included if the pickles were fed to livestock on their farm, . The items least likely to be included in the “basket of goods” used to calculate the Consumer Price Index from the following would be:: (a) airline tickets. (b) cell phones. (¢) typewriters. (d) gasoline. (e) college textbooks. . The most unpredictable and polatile category of economic investment is investment in: {a} commercial and residential construction: research and development [R&D]. (c) machinery and equipment, (d) stocks, bonds, and property. t&) business inventories. . The slope of the Keynesian consumption function is called the: (a) consumption-savings trade-off. (b) marginal propensity to save. (c) average propensity to spend, marginal propensity to consume. (e) consumption possibilities frontier. 10. The total amount that American households would spend even if they had zero income is referred to as: autonomous spending. (b) aggregate expenditures. (c) the Keynesian multiple. (d) induced consumption. (e) Aggregate Demand. . Q nN Q {0 ECI01H Byms — Legibly enter all required information on a Scantron sheet. Quiz 11 Government purchases in GDP accounting would not include: {a) pay for police officers. (g) Social Security checks and other transfer payments. (c) subsidies for cancer research at state universities. (@) fire hydrant maintenance expenses. (e) investments by local governments in new schools. . A downturn in the level of macroeconomic activity tends to be most closely and positively associated with the rate of: (a) yclical unemployment. (6) structural unemployment. {c) part-time unemployment. @ induced unemployment. (e) recessionary unemployment. . Between 1929 and 1933, the price level in. the United States declined by roughly one-third, while nominal wages paid to employed Americans fell by an average of about one-fourth. Thus, the average teal wage rate [adjusted for changes in the Consumer Price Index] of employed Americans: (a) was stable. (b) declined by roughly 25%. (c) increased for skilled workers but decreased for unskilled labor. (d) declined in real terms because of increases in marginal tax rates. (@yincreased by more than 10%. . Classical macroeconomic models conclude that the Aggregate Supply curve is: (a) horizontal. (b) vertical at any given level of aggregate output ((e)vertical at the full-employment aggregate output. (d) relatively flat, (e) dynamically unstable. . Hyperinflation causes severe economic inefficiency when:((a) governments shift from commodity money to fiat monetary systems. (b) the average level of prices increases at a rate exceeding 36 percent annually. (c)relative price changes begin accelerating. (d) people shift to barter because they have lost faith in the purchasing power of money. The Aggregate Supply curve in this figure most co nsistent with classical theory goes through: (a) points a, c, and b{(b} points b, c, and d. (c) points c, a, and d. (d) points d, é, and a. If this economy started at point ¢ before banks became reluctant to lend, so that significant increases in bank reserves reduced the money st Oke shifted Aggregate Demand to Price Level AD», then according to: eynesian theory, the economy will quickly move to point. (b) classical theory, the economy will rapidly adjust to point b. (c) Keynesian theory, the economy will immediately move to point d. (d) classical theory, the economy will instantly shift to point a. national incorne and output If the Maricopa County Sheriff's Department hires three more deputies to help deport illegal aliens, this shows up directly in the Aggregate Expenditures model as an increase in: (a) tax collections. government purchases. (c) the federal deficit. (d) tax rates. (e) government transfer payments. . John Maynard Keynes’s “fundamental psychological law” predicted positive relationships between income and both: (a) exports and imports. (b) gross investment and net depreciation. (c) taxes and government purchases. @ consumption and saving. . Measured GDP for the United States for 1939 would not properly include the value of: (a) tickets sold on opening night for the film, The Wizard of Oz. (b) investment in a new assembly line for Ford pickup trucks (@) ised cars and old industrial machinery sold as “scrap iron” to a Japanese steel manufacturer. @) oil produced in Louisiana and shipped to Jamaica. (e) new military hardware sold to Great Britain on credit under a “top secret” lend-lease program EC101 Byrns Legibly enter all required information on a Scantron sheet. Quiz 8 tho . Asystem of taxes that imposes only an income effect on taxpayers, with no separate substitution effects, is described as: (a) revenue enhancing. (b) horizontally optimal. (c) loophole free. (d) neutral. (¢) vertically equitable. — An individual meets the definition of being a welfare recipient whenever the individual receives benefits from the government, relative to the benefits everyone else receives: (a) in the form of any government check, (b) that provide total utility exceeding that person’s tax payments. (c) from some government activity. (d) but receives a refund after filing income tax forms 1040 or 1040A. (e) that exceed the individual’s taxes as a proportion of total tax payments by all citizens. Distribution of income in accord with the needs standard is least consistent with a: (a) desperate gambler working overtime because of a need to pay a nasty loan shark. (b) destitute family of ten Teceiving more food stamps than a destitute family of five. (c) quote, “From each according to ability, to each according to need” [Louis Blanc]. (d) consideration of family wealth and income when determining college scholarships. (e) law requiring electricity to be left on for a poor old couple who defaulted on their bill. Employers are legally required to pay half the Social Security tax, and to withhold the other half from employee paychecks. Economists agree that the full economic burden of the Social Security tax falls on: (a) labor unions. (b) corporate managers. (©) workers. (d) consumers. (e) corporate stockholders, . Equity [fairness] is ambiguous in part because people’s personal qualities vary greatly. Nevertheless, that laws should treat people equally if they are roughly identical in all characteristics thought relevant for government policy is widely accepted. This notion of fairness is called the principle of: (a) vertical equity. (b) proportionality. ©) egalitarianism. (d) progressiveness. (e) horizontal equity. —_ Suppose political processes address only purely public goods, while all private market activities involve only strictly private goods. Inefficient, unstable, or inequitable outcomes are likely to emerge in both situations as a consequence of: (a) moral hazard, the population crisis, and self-interested environmentalism. (b) empire building, “cut-throat” price competition, and pork barreling. (c) rational ignorance, uncertainty, and asymmetric information. (d) nonrivalness, nonexclusion, and the principal- agent problem. (g) adverse selection, market power, and lumpy decisionmaking. Systematically taxing people more heavily to the extent that they have more income or greater wealth is most in accord with the: (a) progressivity doctrine. (by ability-to-pay principle of taxation. (c) doctrine of horizontal equity. (d) benefit principle of taxation. (e) theory of liberal justice. . . The idea that a competitive market system will distribute income in proportion to the productive contributions, at the margin, of the resoutces individuals own ig called the: (a¥ theory of the invisible hand. (b) marginal productivity theory of income distribution((c) theory of distributive justice. (d) S normative theory of equitable distribution. (e) Pareto distribution of income. The major reason why "free riders" pose problems i€ @)ynonexctusion. (b) non-neuirality. (c) inequity. (d) tax evasion. (e) nonrivalry. 10. Why political candidates and parties tend to cluster around middie-of-the-road positions is best explained by the:((a) rational ignorance hypothesis. (b) law of large numbers. (c) Nirvana fallacy. (d) median voter modet (e) theory of spread minimization. NP fF D ~QGUFPry so ° VW dg EC101H Byrns Legibly enter all required information on a Scantron sheet. Quiz 7H . A boxer who excels as a counterpuncher, a shy person fearful of rejection if asking someone for a date, based on: (a) grim strategy. (b) tit-for-tat countermoves. (c) unpredictable irrationality.) second mover and a bright negotiator interested in buying a used car, would all be well advised to as strategy advantage. (e) a stable Nash equilibrium. . The extreme violence notorious crack dealers are renowned for being willing to deliver to defend profits generated by their control of turf (their sales territories) is, from an economic perspective, an example of a/an: (a))strategic barrier to entry. (b) illicit barrier to entry. (c} geographic barriers to entry. (d) natural barriers to entry. (¢) legal or regulatory barrier to entry. . Workers who retain their jobs will be more sivanees (es firms adjust to increases in: (a) competition in an industry.(b) wages. (c) technological advances. capital costs. (e) government regulation. foreigners reduce equilibrium wage rates for unskilled workers((b)/swim suit sales plummet at the ends of summer vacations. (c) undocumented construction workers begin leaving the United States because the housing market collapsed during a recession. (d) determined dieters eat less high carbohydrate food. (e) baby boomers begin getting Social Security when they retire. An example of a situation in which derived demand decreases Or when: (a) a flood of undocumented - Automation is the process of: (a) adapting equipment that is safer for workers to opera) inet engineering that smoothes work flows on assembly lines. (c) scientific management of robotic factories. (@) substituting sophisticated machinery for human labor. (e) ensuring against industrial sabotage. A Nash equilibrium exists when no player in a strategic game) lose relative position unless another player changes tactics to gain. (b) can increase market'stfare through predatory pricing. (c) has any net incentive to change strategy. (d) confronts a kinked demand curve. (e) realizes economic profits. 7 The relative price of leisure rises when there are increases in the: {a) supply of labor. (b) wage rate“), ; cost of living. (d) marginal tax rate on income. a If all participants behave competitively instead of cooperating because that is the dominant strategy of each individually, then all participants will be worse off than if all had cooperated if the game being played involves (a) prisoners’ dilemma. (b) reciprocal retaliation. (c) predatory pricing. (d) first mover advantages, (e) kitiked supply curves. plea bargaining between defendants and ical auction on E-Bay. basketball games for state championships. (c) pollution, prosecutors in criminal cases. (e) the bidding process in a . Examples of cooperative games would include: (a) ton battles in divorce cases. (b) high school ‘YP. cartel{(b) informative advertising. (c) increases in asymmetric information. (d) competitive advertising. Society-wide economic efficiency is most likely to be enhanced by: (a) cooperation among firms in a (Oi price controls. (e) wa} - Technological changes that replace workers with machinery are known as: {a) homeostasis. (b) nanotechnology. (c¥ automation. (d) featherbedding. (c) solipsism. . A decision maker [agent in a game] who never forgives other players who ever previously failed to cooperate and who punishes them at every opportunity thereafter is pursuing a policy of: (a) motivated vengeance. ((b) grim strategy. (c) perpetual retaliation. (d) bilateral monopoly. (e) negative reciprocity. 9. ly, . 10. 1G, EC101H Byrns Legibly enter all required information on a Scantron sheet. Quiz 6H . A purely competitive economy with no externalities or public goods tends to be efficient because: (a) firms try to act socially responsible. (b) government planners specify the best allocation((c)all prices approximate marginal social benefits and costs. (@ firms consciously coordinate production decisions. Characteristics of purely competitive markets do not include: (a) homogeneous products. (b) large numbers of potential buyers. (c) large numbers of potential sellers. (d}the ability of sellers to set prices. (e) freedom to enter or leave the market in the long run. Every firm that can significantly influence the pric pf its output: (a) is a pure monopoly. (b) will be more profitable than any firm in pure competition/(c) has market power: (d) is necessarily large relative to the market demand curve facing the firm. (e) negatively-sloped supply curve. m shuts down in the short run, its economic: (a) profit is zero. (b) resources have zero opportunity He)os equals its fixed cost. (d) value to shareholders rises. . Ifstpplies of some resources are upwardly sloping to an industry, then increasing the industry’s output results in @) higher output due to increased profits from falling input prices. (b) reductions of output because of increases in production costs. (c) higher average costs of production. (d) decreases in output accompanied by cuts in average costs. Pure competitors produce where P = MC because this: (a) is the best price and output for society. (b) maximizes combined consumer and producer surpluses.((¢) is consistent with maximizing profit at a given price. (d) conforms to government regulations. The most important reason that omists teach the model of pure competition is that it: (a) describes the behavior of most U.S. firn provides underpinnings for models of supply and demand. (c) helps explain why government economi€ policy is necessary. (d) rationalizes national central planning. The short-run supply curye for a competitive firm is the: (2) marginal cost curve that is above the average total cost curve/(b} marginal cost curve that is above the average variable cost curve. (c) upward sloping part of the marginal cost curve. (d) upward sloping part of the average fixed cost curve. Monsicur Cournot has a monopoly on an artesian well from which flows tasty spring water with medicinal €n properties. To avoid variable costs, he insists that customers bring their own pails and fill them personally. Unfortunately, Cournot cannot price discriminate because his customers all deal with each other regularly. If Cournot maximizes his profit: (a) he would sell 6,000 liters per period. (b) he would charge six Euros [€6 ] per liter. (c) his producer surplus would be 36,000 Euros. (d) buyers would enjoy a consumer surplus approximately valued at 18,000 Euros((@) All of the above. The demand for Cournot’s Spring Water (Opointe Price in Euros aN wa HONG ° 3234567 86 8 10 11 12 price elasticity at: (a) point a. (b) point b.((c) point c (d) Output (thousands of titers) point d. (e) point e. 11. The “Identity” in Identity Economics by George Aki and Rachel Kranton refers to: (a) the class, Status, and power of groups to which people belong((b) Self image as it is formed and as it affects one’s behavior. (c) informational asymmetry and problems associated with identity theft. (d) All of the above. K 12. Dr. Kranton focused much of the second half of her talk on how identity: (a) may be as important as wage rates in determining work effort. (b) may be either socially beneficial or harmful. (oF is an essential component of human maturation (@ an be manipulated. -» Yn ECIOIH = Spring 2011 Byrns Legibly enter all required information on a Scantron sheet. /{O paz, SH 1. Adam Smith’s “invisible hand” refers to a process by which peopl trying to serve their own interests also ay tend to maximize social well being. (b) make major economic decisions democratically. (c) depend on monopolies to behave in socially responsible ways. (d) generate balance of payment surpluses by importing less than they export. (e) vote for regulations that stabilize financial markets. 2.” If the production of a good generates such negative externalities as air pollution, water pollution, or noise pollution, then relative to the efficient, socially optimal level of production, the good tends to be: (a) overpriced and underproduced. (b) underpriced and overproduced((c))overpriced and overproduced. (d) underpriced and underproduced. (e) a source of pure entrepreneurial profit. 3. Market prices for huge plasma screen TVs are most likely to fall as a consequence of: (aF strikes by unionized workers in electronics factories in Japan, Korea, and China. (b) seller expectations of shortages of plasma screen TVs. (c) Best Buy running competitors out of business by gaining extra market power over on maintenance when it absorbed the Geek Squad{) ecreases in the quantity demanded of plasma screen TVs. (e) growing expectations by potential buyérs that flat screen TV technology will advance rapidly. 4. Examples of price floors include: (a) farm subsidies for, e.g., corn. (b) utility rate structures on natural gas or electricity, (c) rent controls in London, New York, and San Francisco.((d) sninimum wage laws. 5. All prospective buyers [demanders] would be in equilibrium if this market for teleporter buttons generated a price and a quantity consistent with: (a) eliminating the shortage Q)-Q; existing at Ps. (b) any point along the demand curve in this market. & only price P, and quantity Qo at point @. (d) eliminating the surplus Q3-Q, at price P1. (e) ‘any point along the supply curve in this market. uD o a 6. Participants in this market would experience a surplus in this market for teleporter buttons:/(a)pt every possible price per button exceeding P>. {b) equal to distante-¢d if the price per button equals P}. (c) if this market was initially in equilibrium, and then the government imposed a price per teleporter 3 Qz as tax equal to P,-P; on teleporter button production. (d) at every price Oo & where demand exceeds the supply of teleporter buttons (a) eliminating teleporter buttons per day the shortage Q)-Q; existing at P3. (e) if teleporters were increasingly exported to China. 7, The term “market failure” refers to: (a) the failure of market economies to deal with social problems. (b) the Stock Market Crash of 1929.\(c)cases in which the supplies and demands generated by private decisionmaking in markets yield inefficiency, inequity, or excessive instability. (d) logrolling and pork barrel legislation that powerful special interest groups secure by lobbying. 8. Drive-by shootings by which some groups of beer or liquor producer/distributors attempted to liquidate rival groups largely ended when the: (a) U.S. Constitution was ratified and Whiskey Rebellion that began in 1794 finally ended. (B) 21st amendment to the U.S. Constitution ended prohibition in December 1933. (c) government prosecuted Al Capone for evading income taxes. (d) three largest beer producers in the United States were merged into Anheuser-Busch, Inc. so . Potentially powerful negative externalities are most overwhelmingly a decisive argument against allowing laissez Jaire policies and market demands and supplies to govern the production and distribution of: (a) avian flu antiviru: shots. (b) public education. (c) sewage treatment facilities. ((d)Jatomic weapons. (e) health insurance and health care. 10. “Classical liberal” advocates of the political philosophy.of Adam Smith would strongly oppose: (a) civil liberties. (b) laissez faire government policies. (c) globalizatior governmental central planning. (e) market capitalism. 1 = . Professor Caldwell asserted that both Friedrich Hayek and John Maynard Keynes drew much of their theory from (a) Ludwig von iss () to Neurath. (c) Knut Wicksell. (d) Karl Marx. (e) Milton Friedman. 12. According to Professor Caldwell, Friedrich Hayek strongly disagreed with John Maynard Keynes about whether: (a) increased government spending could cure the Great Depression. (b) European regions should be divided up into socialist countries. (c) Germany should pay war reparations for causing World War I. (d) higher tariffs reduc: exports( (e) High tax rates reduce government tax revenues. Yo 1. The potential money multiplier is to the reserve requirement ratio as the Keynesian “full strength” spending multiplier is to the: (a) rate of return on investment. marginal propensity to save. (c) natural rate of interest. (d) recessionary gap ratio. (e) marginal tax ratéOn income. EC101H Byrns —_ Legibly enter all required information on a Scantron sheet. Quiz 13 2. Variables that do not change automatically because of swings in the business cycle include: (a) interest rates and upemployment rates. (b) cyclical budget deficits or surpluses. (c) the rates of inflation or - —detation (@) structural budget deficits or surpluses. (e) labor force participation rates. 3. Locating someone who has what you want and who wants what you are willing to trade is a requirement : for barter known as the: (a) heterogeneity mandate double coincidence of wants. (c) preference for A liquidity. (d) medium of exchange. (e) principle of reciprocal values. KI A comprehensive federal government budget equation blurs distinctions between monetary and fiscal policy because: (a) G = T+ A bonds + A MB. (b) high tax rates discourage productiye effort. (c) traditional Keynesians assume all budget deficits to be covered by increased taxes, modern monetarists traditionally assume all federal deficits to be bond-financed. (e) a gold standard would make domestic and foreign currencies interchangeable. ) 5. Congressional passage of legislation that increased tax rates and reduced spending would be most likely to reduge: (a) recessionary pressure and budgetary surpluses. (b) the international debt gap. (c) fiscal drag ()inflationary pressure and federal budget deficits. (e) surpluses in the U.S. balance of trade. (3 BK Differences between the potential and actual money multipliers in the United States arise primarily — because: (a) the Federal Reserve System accidentally discovered open market operations. (b) people don’t keep all their money in banks, foreigners like dollars as assets, and banks keep more money in reserves than the legal minimum amounts.((c) the actual money multiplier is positively related to the discount rate. (d) growing exchange rate riSK makes foreigners decreasingly reluctant to hold dollars. (e) C many federal government agencies hold huge amounts of U.S, Treasury bonds. 7. Financial investors are likely to increase their holdings of money if they begin to expect: (a) interest rates on US Treasury and corporate bonds to decline. (b) increases in the price level the prices of common stock to fall and the interest rate on bonds to increase. (d) reductions in the levels of Social Security pensions. (e) higher rates of corporate profit. ~ (2 8. Federal Reserve System purchases of government securities on the open market most directly and . \ ae? immediately increase the: (a) discount rate, monetary base. (c) demand for money. (d) market interest rate. (¢) unemployment rate. occur is the foundation for the use of money as a! (a) edium of exchange. (b) standard unit of account. (©) store of value. (d) standard of deferred payment. (e) measure of value. C AO. Prior to the 1936 publication of John Maynard Keynes’ The General Theory of Employment, Interest, and Money, classical monetary theorists largely rejected any vale (i that money functions as: (a) a A 9, Finessing problems associated with establishing a “double coincidence of wants” before exchanges can [- measure of value in exchange. (b) legal tender. (c) a store of value. (d))a standard unit of account. (e) a medium of exchange. A Ai. The amount by which the purchasing power of currency (e.g., bills and coins) exceeds its production costs is called: (a) seignorage. markup. (c) arbitrage. (d) spread. (e) dividend. System’s: (a) percentage liquidity floor. (b) margin requirement. (c) discount rate. (d) open market 12. The potential money multiplier in the United States is strictly determined by the Federal Reserve Pa E coefficient{ (e)yreserve requirement ratio. é ah. %® 3. 0 6 11. . Ifthe U.S. furniture market is initially in equilibrium at point e and . If droughts in cane-producing regions raise the world Price of sugar, a likely result is: Gyhigher EC101H Byrns Legibly enter all required information on a Scantron sheet. Midterm #1H A drought that wiped out half the watermelon crop would definitely reduce the: (a) prices of watermelons. (b) incomes of watermelon farmers. (c) marginal utility watermelon lovers derive from eating their last bite of watermelon. (d) demand for watermelons. (©) purchasing ower of melon fans who eat as much watermelon every day as they can afford. Cheaee Spoke > sane ee t7 f hn A government policy most likely to result in food shortages and widespread starvation in a relatively underdeveloped economy would be imposition and enforcement of: (a) relatively high tariffs on food exports. (b) extremely low price ceilings on food. (c) martial law(@ large subsidies for food imports. (e) relatively high price floors. A person who knowingly advertises “knock-offs” as designer sunglasses on EBay is engaged in: (a) cognitive dissonance. (b) irrational ignorance. (c) bait-and-switch substitution, verse selection. (e) fraudulent perceptions. If this market begins in equilibrium at point e on SpDp and then young American families increasingly “inherit” furniture as their baby-boomer parents move into smaller retirement homes, this market will tend to shift towards: (a) point i point A. (c) point a. @ point d. (e) point £ then Chinese manufacturers begin exporting more furniture to the United States, this market would move towards a é ew equilibrium Price of Furniture at: (a) point a. (b) point 5. (c) point e. (d) point d, point f, Suppose that in the short run, increased globalization has caused the U.S. furniture market to achieve a temporary equilibrium at point e on SoDp, but most U.S. furniture manufacturers are experiencing Quantity of Fumiture economic losses. As the American furniture industry adjusted, this market would move towards a new equilibrium at: (a) point a. (b) point b. (c) point e.(d)ypoint d. (e) point f Adam Smith argued in his 1776 Wealth of Nations that a nation’s “real” wealth is the: {a) ability of its military to defend its national borders. (b) value of the country’s domestic jand, labor and capital. (c) surplus generated when a country exports more than it imports.((d) ability of the nation to deliver consumable goods and services to its citizens. (e) amount of gold in the country’s national treasury. . Allocating football or basketball tickets by having students wait in long lines that start at Gam on frigid fall and winter mornings is an inefficient.allocative mechanism called: (a) time preference. (b) seniority. (c) tradition. (d) meritocracy () queuing. . An example of how marginal utility diminishes occurs when: (a)a joke is much less funny the third time you hear it. (b) your third favorite vegetable seems far less tasty than your second favorite. (c) you leamed less in your third semester of college than you gained your first semester. (a) your car’s miles-per-gallon of gasoline declines as you drive faster and faster. (©) your tenth hour of cramming for an exam added fewer points to your score than the third hour you studied. ay incomes for dentists/(b) decreases in the supply of jelly beans. (c) less cream in each cup of coffee 9 .4.-4- caffeine addicts dri declines in sales of low-calorie sugar substitutes, (ef reduced demands for popcorn at movie theaters. Demand curves for normal goods negatively sloped in part because of the: (a) law of. increasing cost. (b) complementarity effect. (c) income effect. (d) price reflex effect. (e) correspondence axiom.