Taxes add to and transfers subtract from the flow of income and spending
a. True
b. False
Indicate whether the statement is true or false
False
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Assume there is a shortage in the market for digital music players. Which of the following statements correctly describes this situation?
A) The shortage will cause a decrease in the equilibrium price of digital music players. B) The demand for digital music players is greater than the supply of digital music players. C) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. D) The price of digital music players will rise in response to the shortage; as the price rises the quantity demanded will increase and the quantity supplied will decrease.
The larger the proportion of the consumer's budget that is spent on a product, the more elastic that consumer's demand for the product will be
a. True b. False
Human wants:
a. are unfilled only in the poorer countries of the world. b. can be completely satisfied by advancing technology. c. can never be fully satisfied. d. only apply to necessities. e. exist only if we are selfish.
We benefit from trade if we are able to obtain a good from a foreign country:
a. that has a very low domestic demand. b. the production of which requires a steady supply of unskilled labor. c. by giving up less of other goods than we would have to give up to obtain the good at home. d. by giving up more of other goods than we would have to give up to obtain the good at home. e. that has a substantial number of substitutes in the domestic market.