If the government pays a per-unit subsidy to the producer of a service, we would expect to see a(n) I. increase in the quantity demanded.II. decrease in the out-of-pocket price paid by consumers.III. increase in the quantity supplied by producers.
A. I only
B. both I and II only
C. both II and III only
D. I, II, and III
Answer: D
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The GDP figure does not accurately reflect economic welfare because
a. it does not include non monetary transactions. b. the value of goods produced in the home is usually overstated. c. it includes only consumption goods and services. d. it usually includes an overstated estimate of social costs.
In answering which of the following questions would you find it necessary to calculate a future value?
a. If Jill puts $5,000 today into a bank account that pays 3 percent interest, then how much will she have in the account after 2 years? b. Should ABC Corporation buy a factory today for $2 million, knowing that the factory will yield the corporation $3 million after 5 years? c. As the winner of a lottery, should Michael choose an immediate payment of $250,000 or should he choose annual payments of $30,000 for each of the next 10 years? d. You would find it necessary to calculate a future value in order to answer all of these questions.
Exhibit 7-9 Cost schedule for firm X OutputQuantity Total FixedCost Total VariableCost 0 $100 $ 0 1 100 50 2 100 84 3 100 108 4 100 127 5 100 150 As shown in Exhibit 7-9, the total cost of producing 4 units is:
A. zero. B. $227. C. $250. D. $100.
The demand for diet soft drinks (as a group) is relatively inelastic because
A) there are many of them on the market. B) there are few substitutes. C) the purchase of a soft drink represents a large portion of a person's budget. D) none of the above.