If a local government collects taxes of $500,000, has $350,000 of government consumption expenditures, makes transfer payments of $100,000, and has no interest payments or investment, its budget would
A) show a surplus of $150,000.
B) show a surplus of $50,000.
C) be in balance with neither a surplus nor a deficit.
D) show a deficit of $50,000.
B
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If the real interest rate falls, people decide to ________ because the opportunity cost of ________
A) decrease their consumption expenditure; consumption has decreased B) increase their consumption expenditure; consumption has decreased C) increase their consumption expenditure; saving has decreased D) save more; saving has decreased E) None of the above answers is correct.
A cost function has economies of scale if
A) average fixed costs fall as production increases. B) total costs fall as production increases. C) the average total cost falls as production increases. D) it is less expensive to produce goods jointly rather than separately.