When an increase in government purchases causes firms to purchase additional plant and equipment, we have seen a demonstration of
A. the multiplier effect.
B. supply-side economics.
C. the crowding-out effect.
D. the investment accelerator.
E. none of these answers.
Ans: D. the investment accelerator.
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In perfectly competitive industries with identical firms, consumers always end up paying the entire burden of a per-unit tax on output in the long run.
Answer the following statement true (T) or false (F)
Refer to Figure 9-3. What is the value of the deadweight loss as a result of the quota?
A) $5.25 million B) $8 million C) $17.25 million D) $20 million
If a member of a cartel is the first to alert authorities to the cartel behavior, which of the following will occur to this member firm?
A) The firm will face significant fines. B) The firm's most senior managers will face jail time. C) The firm will not be considered whistle -blowers. D) The firm will not be penalized.
Many persons object to the results of the competitive market system because
a. it takes too much energy to coordinate activities. b. efficient outcomes may not be compatible with their ideas of a fair distribution. c. a few people can control all economic activity. d. it fosters high rents and low beef prices.