Which of the following is an automatic stabilizer that reduces tax receipts during a recession?
A. Medicaid.
B. Corporate and individual income taxes.
C. Indexed retirement and Social Security benefits.
D. Welfare benefits.
Answer: B
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The income effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded
Indicate whether the statement is true or false
The marginal cost curve intersects the average variable cost curve (AVC)
a. only when the AVC is rising b. at the AVC curve's maximum point c. at the AVC curve's minimum point d. only when the AVC is sloping downward e. when the AVC intersects the fixed cost curve
The resource cost of inflation refers to
a. the opportunity cost of the resources spent coping with inflation b. the redistribution of resources due to inflation c. the lost purchasing power due to inflation d. the lost real income due to inflation e. the resources lost due to asking for higher nominal wage increase
Producer surplus measures the
a. benefits to sellers of participating in a market. b. costs to sellers of participating in a market. c. price that buyers are willing to pay for sellers' output of a good or service. d. benefit to sellers of producing a greater quantity of a good or service than buyers demand.