A good is considered normal if demand for it ______ when income ______.
Fill in the blank(s) with the appropriate word(s).
Answer: increases; increases
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Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Also assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600Assume that year 1 is the first year for this economy and year 5 is the current year. What is the public debt in this economy at year 5?
A. $75 billion B. $25 billion C. $925 billion D. $125 billion
Scarcity can be eliminated by
A) abolishing competition. B) abolishing capitalism. C) abolishing money. D) all of the above. E) none of the above.
The marginal social cost curve ________ when production involves negative externalities
A) is parallel to the horizontal axis B) is parallel to the demand curve C) lies above the supply curve D) lies to the right of the supply curve
Which level indicates the point of maximum economic efficiency?
A) lowest point on AC curve B) lowest point on AVC curve C) lowest point on MC curve D) None of the above