The circular flow model shows the relationships between
A. government and business firms.
B. government and households.
C. households and business firms.
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When all other influences on work plans remain the same, the
A) lower the real wage rate, the smaller the quantity of labor supplied. B) higher the real wage rate, the greater the quantity of labor demanded. C) lower the real wage rate, the greater the quantity of labor supplied. D) lower the real wage rate, the smaller the quantity of labor demanded. E) lower the real wage rate, the larger the labor force participation.
The price elasticity of demand for cigarettes is 0.4. If government wants to reduce smoking by 10 percent, by how much should it raise the price of cigarettes by imposing a tax?
A) by 10 percent B) by 20 percent C) by 25 percent D) by 50 percent
Voluntary exchanges generate:
A. surplus, leaving both participants better off than they were before. B. deadweight loss, leaving both participants worse off than they were before. C. deadweight loss, leaving at least one participant worse off than they were before. D. a transfer of surplus from one participant to another.
The MPC indicates the fraction of
A. An additional dollar of disposable income that will be spent. B. An additional dollar of disposable income that will be saved. C. Total income that will be saved. D. Total income that will be spent.