Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
After trade, at a world price of Pw, consumer surplus equals area(s)
A. B + C + E + F.
B. A.
C. A + B + C + E + F.
D. A + B + C + D.
Answer: C
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If net exports is negative, it must be the case that ________.
A. more goods are being exported than imported B. the value of goods, services, and resources exported is less than the value imported C. more goods are being imported than exported D. the value of goods, services, and resources imported is less than the value exported
Which of the following is not a reason why some production continues in households?
a. Some household production requires many specialized resources b. The opportunity cost of household production has decreased over time c. Household production avoids taxes d. There have been important technological advances in household production e. Some households prefer the ability to control production
If the marginal propensity to consumer is 0.8, the spending multiplier must be:
A. 5 B. 1.2 C. 1.8 D. 2
Households derive the majority of their income from
A. government transfers. B. property. C. inherited wealth. D. wages and salaries.