Which statement most accurately defines economics?
A) Economics is the study of how people make money.
B) Economics is the study of how people make choices to satisfy their wants.
C) Economics is the study of values a society should choose.
D) Economics is the study of how to eliminate scarcity.
B
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
A negative externality exists and government wants to impose a per-unit tax in order to bring about the socially optimal output. To accomplish its objective, government must set the tax equal to marginal
A. private cost. B. social benefit. C. external cost. D. social cost. E. private benefit.
Which of the following is not an autonomous determinant of consumption expenditures?
a. real wealth b. the interest rate c. tastes and preferences d. current disposable income
A family's income tax liability is
a. a standard percentage of all income earned. b. determined by wage income rather than dividend and interest income. c. based on total income. d. constant from year to year.