Author Question: Refer to Scenario 1-3. Using marginal analysis terminology, what is another economic term for the ... (Read 49 times)

craiczarry · **on:** Jun 29, 2018

Refer to Scenario 1-3. Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last 400 t-shirts?

A) sales revenue B) marginal revenue C) gross earnings D) gross profit

Question 2

Government spending in the United States has grown over time and now accounts for more than forty percent of United States national income. Does this mean that government has been consistently running a budget deficit?

What will be an ideal response?

cat123 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

A budget deficit arises when the government's spending exceeds its tax revenues. While government spending has been increasing over the last few decades, tax revenues have also grown. Thus, the given information does not imply that the United States government has been running a deficit. Whether the United States government has been running a deficit or a surplus will depend on how much tax revenue it earned compared to how much it spent during these years.