The demand for a service like medical care
a. decreases as income increases, indicating that medical care is an inferior good
b. is completely insensitive to price; that is, demand is perfectly inelastic
c. is perfectly elastic
d. is sensitive to the time component of cost
e. varies directly with the price of that care
D
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An efficient way to get a tire manufacturer to produce the socially optimal output level is
A) to impose a tax to make the tire manufacturer bear the external cost it creates. B) for government to set a quota on the quantity of tires that it can produce. C) to grant a subsidy to enable the manufacturer to internalize the external costs of production. D) to assign property rights to the tire manufacturer.
The existence of an inflationary gap or an recessionary gap depends on the
A. aggregate supply only. B. expenditure schedule. C. leakages schedule. D. injections schedule. E. aggregate demand and aggregate supply schedules.