From an economic standpoint, government intervention may be justified
A. When the private sector is larger than public sector.
B. If the market mechanism fails to achieve the optimal mix of output.
C. Because the government can encourage the production of private goods.
D. Because the government can increase the level of market power of private businesses.
Answer: B
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Peter's monthly income increases from $1,500 to $1,600. As a result, he increases the number of DVDs he buys per month from 2 to 3. Peter's demand for DVDs is
A) price elastic. B) price inelastic. C) income elastic. D) income inelastic.
"If Bill's income increases from $80,000 per year to $91,000 per year and he consumes pickup trucks and lamb chops with his money, Bill's budget line shifts outward and the increase in income means he can consume more trucks and more lamb
" Is this statement true or false? Briefly explain your answer.
Which of the following was not a factor that contributed to improved productivity from 1995 to 2009?
a. surging investment b. falling energy prices c. advances in information technology d. decreased costs for higher education
If M = 12,000 . P = 3, and Y = 32,000 . then velocity =
a. 1.125 . Velocity will rise if money changes hands more frequently. b. 1.125 . Velocity will rise if money changes hands less frequently. c. 8 . Velocity will rise if money changes hands more frequently. d. 8 . Velocity will rise if money changes hands less frequently.