The basic economic problem of scarcity
A) has always existed and will continue to exist.
B) will eventually disappear as technology continues to advance.
C) is a problem only in developing economies.
D) does not apply to the wealthy in society.
Answer: A
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Explanations for the low U.S. saving rate include all of the following EXCEPT:
A. large capital gains in the stock market. B. low real interest rates relative to the rest of the world. C. government programs that provide income for the elderly. D. low down payments required to purchase homes.
The above figure illustrates
A) a recessionary gap. B) a full-employment equilibrium. C) an inflationary gap. D) an equilibrium at the economy's physical limits.
Production possibilities curve are usually bowed outward. This is because
a. the more resources a society uses to produce one good, the fewer resources it has available to produce another good. b. it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced. c. of the effects of technological change. d. resources are specialized, that is, some are better at producing particular goods rather than other goods.
Figure 9.9 depicts a market for electricity. S1 is the supply curve without the external costs. S2 is the supply curve with the $T tax. Assume electricity production incurs external costs. If the government imposes a pollution tax in the amount illustrated, the amount of the pollution tax borne by the electricity producers is:
A. PA - PB. B. PA - PC. C. PB - PC. D. (1/2)?(PA - PB).