When positive spending shocks occur, transfer payments automatically fall
a. True
b. False
A
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Which of the following is included in GDP?
A. Payments received from selling stocks in one's portfolio B. Cash gifts from relatives during the holidays C. The cost of a dinner at a restaurant D. Welfare payments received by some households
Consider a market with a price floor. If the price floor is lowered, which of the following would happen?
a. The consumer surplus would increase, the producer surplus would decrease and the dead weight loss would decrease b. The consumer surplus would decrease, the producer surplus would decrease and the dead weight loss would increase c. The consumer surplus, the producer surplus and the dead weight loss would all decrease d. The consumer surplus, the producer surplus and the dead weight loss would all increase e. The consumer surplus would decrease, the producer surplus would increase and the dead weight loss would increase
Indifference curves located closer to the origin
a. are less preferred to those located farther away from the origin b. are more preferred to those located farther away from the origin c. cannot be tangent to a budget line d. eventually become straight lines that coincide with the budget line e. represent preferences that are not rational
People generally purchase less of a commodity as its price increases. This implies that the relationship between quantity purchased and the price of the commodity must have a
a. slope always equal to one. b. positive slope. c. zero slope. d. negative slope.