Households in the aggregate use the largest share of their total income to:
a. pay taxes
b. consume
c. save
d. buy capital goods
Ans: b. consume
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How would poverty be affected in the United States if the measure were changed to a more comprehensive one that included the value of in-kind transfers, medical services, and taxes?
What will be an ideal response?
Conventional economic theory suggests that in the ultimatum game, the player proposing a split of $50 will propose that she get $49 and that the other player get $1 . By the same reasoning, if the amount to be split is $1000, the player proposing the split will propose that she gets
a. $500 and that the other player gets $500. b. $998 and that the other player gets $2. c. $999 and that the other player gets $1. d. $1000 and that the other player gets nothing.
Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus. Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers. Table 1.2Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)A20NA195 B35 180 C45 150 D50 100NAThe highest opportunity cost in Table 1.2 for B-1 bombers in terms of Stealth bombers is
A. 33 B-1 bombers B. 10 B-1 bombers C. 10 Stealth bomber per B-1 D. 10 Stealth bombers per B-1
Refer to the graph shown. When price declines by 11 percent, quantity supplied falls by 8 percent. Which curve best demonstrates the elasticity in this example?
A. A B. B C. C D. None of the answers is correct.