Question

Q1)

Total government spending in the U.S. economy was around _____ of the GDP in the financial year 2010.

Group of answer choices

36 percent

44 percent

5 percent

16 percent

25 percent

Q2)

The lowest of the federal or state minimum wage levels prevails in each state.​

Group of answer choices

True

False

Q3)

The market process ensures that, when all transactions are voluntary, resources get allocated to ​the use where they are valued the most.

Group of answer choices

True

False

Q4)

Which of the following is a possible reason for a comparatively steeper demand curve for health care?​

Group of answer choices

​A large increase in price does not cause a reduction in the purchase of health care by the same proportion.

​A change in the price of health care leads to no change in the profit earned by the suppliers.

​A large increase in the price of health care leads to a more than proportionate fall in the quantity demanded for health care.

​A large increase in the income of households leads to a less than proportionate increase in the quantity demanded.

​The demand curve for health care is comparatively steeper than other products, because health care is a Giffen good.

Q5)

Assume that as the price of wheat falls from $10 to $8, the quantity demanded of wheat increases from 100 bushels to 150 bushels. This implies the price elasticity of demand for wheat is 0.5.

Group of answer choices

True

False

Q6)

If a 15 percent reduction in the price of electricity per kilowatt hour has no impact on the total electricity consumption, we can infer that in the short run, the demand for electricity is _____.

Group of answer choices

perfectly elastic

relatively elastic

relatively inelastic

perfectly inelastic

unit-elastic

Q7)

The income elasticity of demand _____.

Group of answer choices

must be negative because of the law of diminishing marginal utility

is usually zero because “you can only have so much”

can never be zero

must be positive for all goods because consumers tend to buy more at higher incomes

could be positive, negative or zero, depending on the nature of the good

Q8)

If = -1.50 for a good, and price of the good decreases by 20 percent, then:

Group of answer choices

quantity demanded will increase by 3 percent.

total revenue will remain unchanged.

quantity demanded will decrease by 30 percent.

total revenue will decrease.

quantity demanded will increase by 30 percent.

Q9)

In utility analysis, it is assumed that marginal utility diminishes as consumption of a product decreases.

Group of answer choices

True

False

Q10)

An indifference curve shows _____.

Group of answer choices

the relationship between total and marginal utility

the relationship between the quantity of a good and the maximum attainable satisfaction

that the quantities of a good that give a consumer maximum satisfaction are directly related to price

the relationship between the price and quantity of a good that a consumer is able to purchase

the various combinations of two goods that give a consumer the same amount of satisfaction

Answer 1

Answer 1:

Option A. Total government spending in the U.S. economy was around 36 per cent of the GDP in the financial year 2010.

Answer 2:

False. Each state has its own minimum wage rate and it can differ from state to state. It can be higher or lower than federal minimum wage rate.

Answer 3:

True. In free market allocation, the resources are allocated to the use where they are valued the most based on their marginal productivity and price.

Answer 4:

Option A. The demand curve for healthcare is steeper because a large increase in healthcare does not lead to reduction in the purcahse by same porportion rather it decreases quantity by less than change in price level.