Explain why national income and domestic product must be equal
When a firm produces goods and sells them, it uses the sales revenue to pay all the factors of production, such as labor, persons who loaned funds, rent on leased property, and profits to owners of the firm. The total value of production, or total sales revenues, becomes income for someone. This basic identity provides the basis for the circular flow of income and spending between the major sectors of the economy.
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Assume the demand function for good X can be written as Qd = 80 - 3Px + 2Py + 10I, where Px = the price of X, Py = the price of good Y, and I = Consumer income. According to this equation:
A) a rise in the price of Y would cause the demand for X to decrease. B) X and Y are complements C) X is an inferior good. D) X and Y are substitutes.
Why is it important to consider the personal income tax when evaluating the corporate income tax? Give an example of how differential rates between the corporate and personal income tax rates can change taxpayer behavior
What will be an ideal response?
How does an increase in income affect the market for iPads (normal good)?
a. The demand curve for iPads shifts to the right b. The demand curve for iPads shifts to the left c. The supply curve for iPads shifts to the right d. The supply curve for iPads shifts to the left
"The marginal utility received from each additional unit of a good consumed declines, other things constant." This is a statement of the law of
a. increasing marginal returns b. marginal rate of substitution c. supply d. diminishing marginal utility e. demand