When the selling price of a good rises (goes up), what is the relationship to the quantity supplied?
a. The profit made on each item goes down.
b. It becomes practical to produce more goods.
c. The cost of production goes down.
d. There is no relationship between the two.
Answer: b. It becomes practical to produce more goods.
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If a consumer's budget line for food (F) and shelter (S) is represented as F = 250 - 5S, and 50 units of food is purchased, how many units of shelter can be purchased at most?
A) 0 B) 40 C) 60 D) 80
Which of the following policies would increase the demand for loanable funds and thus investment spending?
a. A reduction in the investment tax credit. b. An increase in the corporate profits tax. c. A reduction in the capital gains tax. d. An increase in the investment tax credit. e. An increase in transfer payments.
A decrease in the wage rate would lead to a movement
A. down the MRP curve and an increase in the number of workers hired. B. down the MRP curve and a decline in the number of workers hired. C. up the MRP curve and a decline in the number of workers hired. D. up the MRP curve and a rise in the number of workers hired.
Which one of the following is not an example of final goods in national income accounting?
A. Desktop computer purchased by an executive for business use B. Tractor purchased by a construction company C. Lumber and steel beams purchased by a construction company D. Laptop computer purchased by an executive for personal use