Question

Question 10 (1 point)

Which of the following statements is true?

a	Purchasing power is the ability to buy goods and services.
b	While goods are tangible (say, apples and laptops), services are intangible (say, haircuts and lawn mowing).
c	Income is the amount of money one makes a year.
d	All of the above.
e	Only a) and b)

Question 11 (1 point)

Which of the following statements is true?

a	Price is the amount of money that must be paid to the seller by the buyer in order to obtain a good or service.
b	Any point “above” the budget line represents an attainable combination of goods. Given his income, the individual can buy the combination.
c	Any point on or “below” the budget line represents an unattainable combination of goods. Given his income, the individual cannot afford to buy the combination.
d	All of the above.
e	Only a) and b)

Question 12 (1 point)

Which of the following statements is true?

a	Changes in wealth affect the demand for goods.
b	An increase in the price of a substitute good reduces the demand for the other good.
c	A decrease in the price of a complementary good reduces the demand for the other good.
d	All of the above.
e	Only a) and b)

Answer 1

Ans 10:

a	Purchasing power is the ability to buy goods and services.

This is the correct answer. Purchasing power shows how much can you afford the goods and services with your income.

Ans 11:

a	Price is the amount of money that must be paid to the seller by the buyer in order to obtain a good or service.

This is the correct option. The price is the amount the buyer should pay to seller in order to obtain goods and services from him

Ans 12:

a	Changes in wealth affect the demand for goods.

This is the correct option. As the wealth rises, the demand for good rises and vice versa