In the circular-flow diagram, households and firms are the decision makers
a. True
b. False
Indicate whether the statement is true or false
True
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In the above figure, household income is shown by flow
A) A. B) B. C) C. D) F.
Regarding demand elasticity, which of the following statements is correct?
A. If demand for seller’s product is elastic, a price increase will decrease total revenue. B. If demand for seller’s product is elastic, a price increase will increase total revenue. C. If demand is exactly unit elastic, an increase in price will raise total revenue. D. If demand is exactly unit elastic, an increase in price will raise total revenue.
When interest rates fall
a. firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding. b. firms want to borrow more for new plants and equipment and households want to borrow less for homebuilding. c. firms want to borrow less for new plants and equipment and households want to borrow more for homebuilding. d. firms want to borrow less for new plants and equipment and households want to borrow less for homebuilding.
Refer to Scenario 1.2 below to answer the question(s) that follow.SCENARIO 1.2: A scientist wants to understand the relationship between automobile emissions and the level of global warming. The scientist collects data on the volume of automobile emissions and the levels of global warming over time. The scientist concludes that a 1% increase in automobile emissions causes a 0.0003% increase in average global temperatures. From this information he concludes that the automobile emissions are harmful to the environment and should be reduced to stop the increase in global temperatures.Refer to Scenario 1.2. The statement that an increase in automobile emissions causes an increase in global warming is an example of
A. deductive reasoning. B. a fallacy. C. an economic theory. D. normative economics.