Economists are concerned with an individual's
A) needs because needs represent the most important goods to an individual.
B) needs because economists define needs to be the goods people need to survive.
C) wants because, unlike needs, wants lead to shortages in the economy.
D) wants because the existence of wants leads to scarcity.
Ques. 2The marginal tax rate shows
A) the percentage of income which a typical family pays in tax.
B) the average rate of taxation in the economy.
C) the deductions which are permitted for child care and medical expenses.
D) the extra tax due on an extra dollar of income.
Ques. 3The law of demand shows that there is
A) an inverse relationship between price and profit.
B) an inverse relationship between price and resource cost.
C) an inverse relationship between price and quantity demanded.
D) a direct relationship between price and quantity demanded.
Ques. 4Under a pure price system, the decision of resource allocation is made by
A) the head of the government.
B) a queen or king.
C) individuals who own the resources.
D) no one.
Ques. 5Market failures occur when
A) externalities exist.
B) economic efficiency increases.
C) there is an increase in demand.
D) there is a change in quantity demanded.
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