According to Say's Law, in the aggregate
a. demand creates its own supply
b. the production of output will generate exactly enough income to purchase what has been produced
c. the economy is incapable of producing output fast enough to ensure full employment
d. full employment cannot be sustained without government action
e. consumer saving prevents the economy from reaching full employment
B
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The production possibilities frontier assumes all of the following except
A) labor, capital, land and natural resources are fixed in quantity. B) the economy produces only two products. C) any level of the two products that the economy produces is currently possible. D) the level of technology is fixed and unchanging.
Better health allows people to work harder, which raises a country's total income. This indicates that in effect, better health
A) is a primary cause of price increases. B) reduces the incentive to work. C) shifts out a country's production possibilities frontier. D) increases consumer surplus.
Recently American Airlines started charging $15 for each checked baggage. Why did the company not charge $15 to $20 more per ticket and quietly avoid this publicity?
What will be an ideal response?
Moral hazard occurs because people act
A) in the interest of others at all time. B) in the best interest of society. C) in their own self-interest. D) like anarchists.