What do government purchases include in national income accounting?
A. Government transfer payments
B. Purchases of goods for consumption but not public capital goods
C. Purchases by federal, state, and local governments
D. Purchases by the federal government only
Answer: C
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Refer to Figure 9.2. A movement from point c to point b could be caused by a simultaneous ________ and ________
A) decrease in government spending; decrease in the price of oil B) increase in government spending; increase in the money supply C) increase in taxes; decrease in government spending D) decrease in taxes; increase in the price of oil
When the Dallas Cowboys score more than 30 points in a game, they win the game. This is an example of
A) an economic theory. B) a correlation. C) an incentive to win the game. D) a normative statement. E) a statement on the margin.
If the market price is $4 and a perfectly competitive firm is producing 500 units and the marginal cost to produce the 500th unit is $4, which of the following is true?
A) The firm is maximizing profit. B) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is negative. C) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is positive. D) The firm should increase production to maximize profit.
A union can induce a rise in equilibrium wages in a unionized industry by
A) reducing the marginal revenue product of labor to zero. B) successfully increasing the demand for union labor. C) successfully decreasing the demand for union labor. D) reducing the marginal revenue product of firms employing union labor.