The economic model of consumer behavior predicts that
A) consumers will try to earn as much income as they can over their lifetimes.
B) consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy.
C) consumers will try to accumulate as many goods and services as they can before they die.
D) consumers divide their time between consumption and leisure activities in order to maximize social welfare.
Answer: B
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What takes place in the indirect finance market?
A) Corporate and government bonds are sold to savers. B) Government purchases of buildings and equipment are sold to the highest bidder. C) Part ownership of corporations is sold in the form of stocks. D) Deposits of savers are accepted and lent to borrowers.
The long-run level of RGDP changes whenever the aggregate demand curve shifts
a. True b. False Indicate whether the statement is true or false
Define the following terms and explain their importance to the study of economics. a. Demand b. Surplus c. Equilibrium d. Law of supply and demand e. Quantity demanded
What will be an ideal response?
Government programs that take money from high-income people and give it to low-income people typically
a. improve economic efficiency because they reducing poverty. b. reduce economic efficiency because they distort incentives. c. have no effect on economic efficiency because they both reduce poverty and distort incentives. d. sometimes improve, sometimes reduce, and sometimes have no effect on economic efficiency.