Author Question: Why must total income be identical to the dollar value of total output? What will be an ideal ... (Read 109 times)

lindiwe · **on:** Jun 30, 2018

Why must total income be identical to the dollar value of total output?

What will be an ideal response?

Question 2

Economic growth can be depicted as

A) an outward shift on the production possibilities curve.
B) a movement up on the production possibilities curve.
C) a movement down on the production possibilities curve.
D) an inward shift on the production possibilities curve.

Jane · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Total income must be identical to the dollar value of total output because spending by one person is income for another. Further, the definition of profit is important. Profit is the amount left over from total business receipts after all other costs have been paid. Hence, profit is the residual that makes total income equal to the dollar value of total output.

Answer to Question 2

A