The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following is an example of a point that is inefficient?
A) 0 chocolate bars and 100 cans of cola
B) 20 chocolate bars and 80 cans of cola
C) 32 chocolate bars and 40 cans of cola
D) 38 chocolate bars and 0 cans of cola
D
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When tax revenues minus outlays is
i. positive, the government has a budget surplus. ii. negative, the government has a budget deficit. iii. zero, the government has a balanced budget. A) iii only B) ii and iii only C) i and ii only D) i only E) i, ii, and iii
If the Fed purchases government bonds, it
A) decreases bank reserves and the supply of money. B) decreases bank reserves but increases the supply of money. C) increases bank reserves and the supply of money. D) increases bank reserves but decreases the supply of money.
The shape of the production possibilities curve in the above figure indicates that
A) production of corn is characterized by increasing costs while the production of cloth is characterized by decreasing costs. B) production of both corn and cloth is characterized by increasing costs. C) production of both corn and cloth is characterized by constant costs. D) production of corn is characterized by constant costs and the production of cloth is characterized by increasing costs.
Which of the following best reflects the ability-to-pay philosophy of taxation?
a. an excise tax on coffee b. an excise tax on gasoline c. a progressive income tax d. a tax on residential property