Which of the following attributes of trade explain why it is important for economic prosperity?
a. Trade moves goods from people who value them less to people who value them more.
b. Trade makes it possible to produce a larger output as a result of lower per unit costs that often accompany large-scale production.
c. Trade makes it possible to produce a larger output as a result of gains from division of labor and specialization.
d. All of the above.
D
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The marginal cost to society of reducing pollution increases with the increased use of pollution abatement because
A) of the diminishing marginal utility of abatement. B) of the reduced demand for abatement. C) of the diminishing returns from abatement. D) of the high cost of abatement.
The incidence of a payroll tax
a. depends upon whether it is levied on the employer or employee. b. is the same whether it is levied on the employer or the employee. c. is more heavily on the employee as demand for labor becomes more elastic. d. is more heavily on the employer as demand for labor becomes less elastic.
To prevent cost-push inflation
A) there must not be an excess demand for money B) interest rates must not rise C) there must not be an increase in government purchases D) the Fed must not let the quantity of money rise persistently.
Wages that are "sticky":
A. pull other prices up or down with them when they change. B. have not changed, in real terms, for decades. C. are stuck where they are and fail to adjust downwards in a recession. D. are pegged to other variables, such as product prices.