Voluntary exchange requires that there must be mutual gain.
Answer the following statement true (T) or false (F)
True
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How can increases in a country's total income improve health?
What will be an ideal response?
The output level for a perfect price discriminator is found where
a. MR = ATC b. MC = P c. MR = P d. TR = TC e. AR = ATC
Which of the following best explains why a $10 billion increase in transfer payments has a smaller impact on aggregate demand than a $10 billion increase in government purchases?
A) An increase in government purchases can be paid for with a bond issue while transfer payments must be funded by taxes. B) An increase in transfer payments can be paid for by borrowing, but an increase in government purchases must ultimately be funded by tax increases. C) Households save part of an increase in income while the entire increase in government purchases represents additional spending. D) An increase in transfer payments does not create a multiplier effect, but an increase in government purchases does.
An increase in consumer income will
A. shift out the budget constraint and increase the consumption of both goods, if they are normal goods. B. pivot the budget constraint on the axis with the good that has the higher price. C. shift the budget constraint and increase its slope. D. reduce consumption of all normal goods.