Which one of the following accounting identities is TRUE?
A. National income plus profit equals personal income.
B. Disposable personal income plus non-income expense items equals personal income.
C. Disposable personal income plus indirect business taxes equals personal income.
D. Disposable personal income plus personal income taxes equals personal income.
Answer: D
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If a firm operating in a perfectly competitive industry is confronted with an equilibrium market price of $5, its marginal revenue
A. will be greater than $5. B. will also be $5. C. will be less than $5. D. may be either greater or less than $5.
For a common resource, the equilibrium with no government intervention is such that ________ is less than ________
A) marginal private cost; marginal social benefit B) marginal social benefit; marginal social cost C) marginal private benefit; marginal social benefit D) total social benefit; total social cost
Compared to coffee, we would expect the cross elasticity of demand for:
A. tea to be negative, but positive for cream. B. tea to be positive, but negative for cream. C. both tea and cream to be negative. D. both tea and cream to be positive.
A situation in which there is a reduction in quantity supplied to zero when there is the slightest decrease in price is
A) perfectly elastic supply. B) perfectly elastic demand. C) perfectly inelastic supply. D) perfectly inelastic demand.