Econ 2305 final Questions and Answers

In the basket of goods that is used to compute the consumer price index, which of the following categories of consumer spending is the largest? Ans- education& communication, recreation, medical care. A transfer payment is a payment made by Ans- a payment for which the government receives neither good nor services in return. he law of supply states that, other things equal, when the price of a good Ans- rises, the quantity supplied of the good rises. Among economic models, the circular-flow diagram is unusual in that it Ans- does not involve mathematics. The increase in living standards of American workers over the past century is primarily due to AnsJust like models constructed in other areas of science, economic models AnsWhich of these terms are used interchangeably? Ans- "inputs" and "factors of production" Over the past century, the average income in the United States has risen about Ans- eightfold. Which of the following statements about market economies is correct? Ans- -Market economies are characterized by decentralized decision making and self-interested decision makers. -In a market economy, no o