As a consumer you believe yourself to act rationally, optimally and self-interestedly. You like ice cream and value a pint at $7 . Usually you buy a pint each week at $4 . This week however, the price jumped to $5 a pint. What would you do?
a. buy the ice cream since the price is still below your maximum willingness to pay
b. buy the ice cream since even at the new price it gives you a positive amount of consumer surplus
c. not buy the ice-cream since the price is now higher
d. both A&B
d
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In traditional economies, people base economic decisions on the precedents established by previous generations
a. True b. False Indicate whether the statement is true or false
Which of the following statements is true?
A. National income is total income earned by households whereas personal income is total income received by households (including transfer payments). B. Disposable personal income equals personal income plus personal taxes. C. The expenditures approach yields a higher GDP value than the income approach. D. The expenditures approach yields a lower GDP value than the income approach.
Which of the following is the definition of the government budget deficit??
A. The total of all past and future tax collections. B. An excess of government spending over revenues during a given period of time C. The total value of all outstanding government securities. D. An excess of government revenues overspending during a given period of time.
The long-run Phillips curve applies when the economy is at full employment, so the long-run Phillips curve is
A) upward sloping. B) downward sloping. C) vertical. D) horizontal. E) unnecessary.