Suppose the market for pizza slices is in equilibrium at a price of $1 per slice. What conditions are likely to be satisfied in the pizza slice market? What will be an ideal response? ANSWER The conditions that are satisfied when the market for pizza slices is in equilibrium are: a) The number of […]
Date: September 2nd, 2020
How are the following events likely to affect the market supply of rice in an economy? a) A fall in the wage rate of farm labor b) An increase in the productivity of farm capital due to better technology c) An increase in the use of agricultural land for non-agricultural purposes ANSWER a) A […]
Date: September 2nd, 2020
Economic growth occurs when there is A) lower taxes on individuals. B) growth in government spending. C) growth in technology that increases productivity. D) more environmental regulation. ANSWER C
Date: September 2nd, 2020
The ratio of the change in consumption to the change in disposable income is the A) average propensity to save. B) marginal propensity to consume. C) average propensity to consume. D) marginal propensity to save. ANSWER B
Date: September 2nd, 2020
“The level of employment in an economy determines its real GDP, other things held constant.” Do you agree or disagree? Why? What assumptions are necessary for your conclusion based on the classical model? What will be an ideal response? ANSWER Agree. Production requires workers so the more workers that are employed the greater total […]
Date: September 2nd, 2020
Explain the term “free riders.” What will be an ideal response? ANSWER Free riders are people who don’t contribute but still benefit from the actions that others undertake. Sometimes people pursue their own private interests and don’t contribute voluntarily to the public interest, and this causes free riding. For example, a free rider may […]
Date: September 2nd, 2020
A patent is a government protection that gives A) monopolies the right to be sole producers due to economies of scale. B) consumers the right to sue when products are unsafe. C) companies the right to produce any good they choose. D) inventors exclusive rights to their product for a time. ANSWER D
Date: September 2nd, 2020
Free trade A) helps economic growth by increasing tariffs. B) hurts economic growth because foreigners are not bound by the same patent laws as we are. C) helps economic growth by encouraging the sharing of technology and industrial ideas. D) hurts economic growth because foreign countries can produce goods with lower labor costs. ANSWER […]
Date: September 2nd, 2020
In the above table, the marginal propensity to save is A) 0.6. B) 0.8. C) 0.2. D) 0.4. ANSWER C
Date: September 2nd, 2020
The curve that displays total planned real spending on goods and services at each price level by households, businesses, the government, and foreign residents is called A) the employment curve. B) the aggregate demand curve. C) the price level curve. D) the aggregate supply curve. ANSWER B
Date: September 2nd, 2020
