Economic analysis assumes that
What will be an ideal response?
changes in the personal benefits and costs associated with a choice will exert a predictable influence on human behavior.
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When the federal government changes purchases and/or taxes to stimulate the economy or rein in inflation, such policy is
A. automatic fiscal policy. B. active monetary policy. C. active federal policy. D. discretionary fiscal policy.
The aggregate demand curve will shift to the right ________ the initial decrease in taxes
A) by less than B) by more than C) by the same amount as D) sometimes by more than and other times by less than
As a result of the tax, consumption of this good will decline by
A. 5 units.
B. 10 units.
C. 15 units.
D. quantity consumed will not decline at all.
Which of the following best expresses the law of diminishing returns?
A. Because large-scale production allows the realization of economies of scale, the real costs of production vary directly with the level of output. B. Population growth automatically adjusts to that level at which the average product per worker will be at a maximum. C. As successive amounts of one resource (labor) are added to fixed amounts of other resources (capital), beyond some point the resulting extra or marginal output will decline. D. Proportionate increases in the inputs of all resources will result in a less-than-proportionate increase in total output.