Which of the following questions can be answered using the concepts of macroeconomics?
A) What is the effect of an increase in price on the supply of a good?
B) Why do some firms produce differentiated goods?
C) What is the difference between a public good and a private good?
D) Why does the rate of economic growth fluctuate from year to year?
D
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Assume an individual is currently using all of his income to consume two goods — X and Y
If the prices of X and Y are $3 and $8, respectively, and the marginal rate of substitution of X for Y is four, is this individual maximizing his net benefits from consumption? If not, what should he do to increase his total utility?
The adaptive expectations hypothesis implies that people:
a. adjust their expectations quickly to policy changes. b. expect the next period to be pretty much like the recent past. c. will always be correct in their forecast for the next period. d. change their expectations about the future if policy changes.
The pay-as-you-go nature of the Social Security system means that _____
a. current beneficiaries are paid out of general tax revenues
b. current beneficiaries are paid out of the payroll taxes levied on current workers
c. current beneficiaries are paid based on contributions made during their last five working years
d. current beneficiaries are paid out of current earnings on the Social Security trust fund
Determine which of the following transactions may require adjustments.
a. Equipment was purchased in the middle of the year. b. An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. c. Six months of rent were paid in advance. d. A one-month premium on an insurance policy was paid e. Supplies were purchased at the beginning of the year, but not all were used. f. A 24-month insurance policy was prepaid g. Rent was paid for the month. h. An employee was paid his weekly wages in full at the end of the week.