Income transfers directly alter the mix of output and answer the question of WHAT is produced question.
Answer the following statement true (T) or false (F)
False
Income transfer programs do not change the mix of output; they change FOR WHOM it is produced.
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When a banker records how many dollars each of his borrowers owes the bank, money is serving as a
A. store of value. B. medium of exchange. C. legal tender. D. unit of account.
The difference between the ________ and the ________ from the sale of a product is called producer surplus
A) highest price a firm would have been willing to accept; lowest price it was willing to accept B) cost to produce a product; profit received C) lowest price a firm would have been willing to accept; price it actually receives D) cost to produce a product; price a firm actually receives
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Absorption is equal to
A) $25 billion. B) $31 billion. C) $35 billion. D) $39 billion.
When goods are subject to market failure, all of the following are possible solutions to the market failure except:
A. change social norms. B. have government either regulate the market or provide the good. C. privatize the good. D. set a very specific consumer quota on consumption.