If the Lorenz Curve were used to graph the distribution of income in an economy where all households earn the exact same income, the graph would show a _____.
(A) Curved line and sloped diagonally upward.
(B) Straight line and sloped diagonally upward.
(C) Curved line and sloped diagonally downward.
(D) Straight line and sloped diagonally downward.
Ans: (B) Straight line and sloped diagonally upward.
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An expansionary fiscal policy will lead to
A. higher interest rates, an appreciated dollar, and reduced net exports. B. higher interest rates, an appreciated dollar, and increased net exports. C. reduced interest rates, an appreciated dollar, and reduced net exports. D. reduced interest rates, an appreciated dollar, and increased net exports.
How are the roles of the household different in the goods market and in the factor markets?
What will be an ideal response?
Refer to Figure 2-17. One segment of the circular flow diagram in the Figure shows the flow of funds from market F to economic agents G. The funds represent spending on goods and services. What is market F and who are economic agents G?
A) F = factor markets; G = households B) F = factor markets; G = firms C) F = product markets; G = firms D) F = product markets; G = households
Refer to the table below. If at the current advertising level, A = $10,000, B = $15,500, and C = $7,800, to maximize profit, which of the following should the firm do?
The table above shows the current costs for a firm to advertising on the radio, television, and newspaper.
A) The firm should decrease its advertising on the radio and increase its advertising in newspapers.
B) The firm should decrease its advertising on the television and increase its advertising in newspapers.
C) The firm should increase its advertising on the television and decrease its advertising in newspapers.
D) The firm should decrease its advertising on the radio and decrease its advertising in newspapers.