Which of the following is one of the reasons economists sometimes differ in their views on social policy?
A. Different models focus on the same aspects of a problem.
B. Economists' subjective value judgments will differ.
C. Empirical evidence is so precise that there is little room for different interpretations.
D. Most so-called economists have received no formal training.
Answer: B
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For a competitive market,
a. a seller can always increase her profit by raising the price of her product. b. if a seller charges more than the going price, buyers will go elsewhere to make their purchases. c. a seller often charges less than the going price to increase sales and profit. d. a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.
When the selling price of a good rises (goes up), what is the relationship to the quantity supplied?
a. The profit made on each item goes down. b. It becomes practical to produce more goods. c. The cost of production goes down. d. There is no relationship between the two.
Which of the following statements about the underground economy is true?
A) The underground economy in developing countries amounts to less than 10% of measured GDP. B) Most transactions that occur in the underground economy are included in the calculation of GDP. C) Excluding underground economy production from measured GDP causes errors in GDP growth estimates in the long run. D) Income that is earned but not reported as income for tax purposes is included in the calculation of GDP.
A product that has a negative income elasticity of demand is ________ good
A) a complementary B) a substitute C) a normal D) an inferior E) a negative