Based on the graph showing the supply and demand for health care service, what would happen to area ABC if a new national program provided unlimited free health care to everyone?
a. It would grow.
b. It would shrink.
c. It would disappear.
d. It would remain stable.
a. It would grow.
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A bond with a high yield
A. gives investors a high return on their investments. B. gives investors a low return on their investments. C. sells for a high price. D. sells for a low price.
An S-corporation is designed
A. to allow stock sales to other corporate entities. B. to allow for unlimited numbers of shareholders. C. for large new incorporations. D. for small businesses to incorporate.
It is commonly believed that the best ways to motivate an employee are (1) to improve the quality of the workplace and (2) to make the employee feel like he/she is part of the company. How would an economist analyze these statements?
What will be an ideal response?
What is the benefit of understanding the income and the substitution effects?
A) The income effect might run in the opposite direction of the substitution effect. B) The income effect always runs in the opposite direction of the substitution effect. C) The income and substitution effects just offset each other, which explains a lot. D) The income and substitution effects are proportional to each other.