If resources are allocated efficiently in a market economy:
A. each person's utility is maximized, and so the result is Pareto optimal.
B. the outcome will always be socially desirable.
C. the way final goods and services are distributed does not matter to society.
D. the outcome may not be socially desirable if distributional issues are also important.
Answer: D
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Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line
Suppose that the slope of the line is positive and is less than 1. This slope means that a change in x is associated with A) a bigger change in y. B) a smaller change in y. C) no change in y. D) an equal change in y.
Consumption consists of spending by households on goods and services, with the exception of
a. purchases of intangible services. b. purchases of durable goods. c. purchases of new houses. d. spending on education.
If the government pays a per-unit subsidy to the producer of a service, we would expect to see a(n) I. increase in the quantity demanded.II. decrease in the out-of-pocket price paid by consumers.III. increase in the quantity supplied by producers.
A. I only B. both I and II only C. both II and III only D. I, II, and III
Suppose Megan withdraws $75 from her savings account and deposits it into her checking account. This transaction causes M1 to
A. Decrease by $75 and M2 to remain the same. B. Remain the same and M2 to increase by $75. C. Increase by $75 and M2 to remain the same. D. Increase by $75 and M2 to decrease by $75.