In the circular flow diagram, the value of all the income in the economy is greater than the value of goods and services produced in the economy
Indicate whether the statement is true or false
FALSE
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Refer to Figure 3.2. Which assumption concerning preferences do Alvin's indifference curves violate?
A) Diminishing marginal rates of substitution B) Transitivity of preferences C) More is preferred to less D) Completeness E) both A and C
When income is distributed perfectly equally in a population, the Lorenz curve is a straight line
a. True b. False
Negative externalities are created when
A) an increase in the price of butterfat drives up the price of ice cream. B) a driver leaves his car in a parking space after the meter expires and receives a ticket. C) a driver drives recklessly on a busy highway. D) a driver pulls over to help a stranded motorist fix a flat tire.
Give a brief definition of fiscal policy. What are its economic goals?
What will be an ideal response?