If income rises
A. the demand curve will stay the same since only price effects it.
B. the demand curve will shift right.
C. the demand curve will shift left.
D. one cannot tell which way demand shifts with the information given.
Answer: D
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Which of the following is true if the opportunity cost of producing a particular good is less than its accounting profit?
A. Economic profit is zero. B. Economic profit is negative. C. Economic profit is positive. D. Economic profit cannot be determined.
A difference between moral hazard and adverse selection is that
a. moral hazard deals with pre-contractually determined public information b. moral hazard deals with post-contractually determined private information c. adverse selection deals with pre-contractually determined private information d. adverse selection deals with post-contractually determined public information
Which of the following explains why pork-barrel spending is often approved, even when the spending is inefficient?
a. Each representative has little incentive to oppose pork-barrel spending since the tax savings would accrue to taxpayers throughout the nation. b. General opposition to pork-barrel spending by a legislator would make it more difficult for the legislator to arrange for pork-barrel projects that provide concentrated benefits for his district. c. Logrolling increases the likelihood that pork-barrel projects will be approved. d. All of the above are correct.
Michael can buy either pizzas or submarine sandwiches. If the prices of pizzas and submarine sandwiches double and Michael's money income triples, we can conclude that Michael's budget constraint will
A. shift out but remain parallel to the old one. B. remain unchanged. C. shift in but remain parallel to the old one. D. swivel in so that the slope of the budget constraint is doubled.