Answer the following statements true (T) or false (F)
1. In the expenditures approach, transfer payments such as unemployment compensation are
included in the G component of GDP.
2. National income (NI) is estimated as the sum of four categories of income (wages, rent,
interest, profits) plus taxes on production and imports.
3. Personal income (PI) is the income that households are free to spend or save as they please.
4. Disposable income (DI) includes transfer payments like Social Security benefits and
unemployment benefits.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
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Game theory would classify a cartel under the topic of
A) zero-sum games. B) cooperative games. C) noncooperative games. D) dominant-strategy games.
If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50, this is evidence of
A) diminishing returns. B) economies of scale. C) diseconomies of scale. D) the law of supply.