What is an economic variable? Give an example of an economic variable
What will be an ideal response?
An economic variable is something measurable that can have different values, such as the wages of software programmers. (Students will give many different examples.)
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Which of the following is TRUE regarding the effect expected future income has on saving?
I. As expected future income increases, saving increases. II. Young people typically save very little. III. Middle aged people, earning higher incomes, are not very big savers. A) I and III B) II only C) III only D) II and III
Which of the following helps explain why the aggregate quantity demanded of goods and services is inversely related to prices within the framework of the AD/AS model?
a. As prices fall, domestic consumers have an incentive to buy more of the cheaper goods and services. b. As prices fall, the monetary authorities will have to increase the money supply, which will lead to an increase in the quantity of goods and services purchased. c. As prices fall, the government will have to reduce taxes, which will lead to an increase in the quantity of goods and services purchased. d. As prices fall, the wealth of people holding the fixed quantity of money increases, causing them to expand their purchases of goods and services.
What is the difference between socialism and communism? What are some examples of countries that are largely socialistic and some that are communistic?
What will be an ideal response?
Is a monopolistically competitive firm productively efficient?
A) Yes, because it produces where marginal cost equals marginal revenue. B) No, because price is greater than marginal cost. C) No, because it does not produce at minimum average total cost. D) Yes, because price equals average total cost.