Assume that in an effort to help consumers, the government decides to reduce the amount of taxes it imposes on sellers of gasoline, that is, sellers are required to pay the government a smaller fee for each gallon of gas they sell
In the market for gas, this would have the effect of causing an increase in the supply of gas and a decrease in equilibrium price. Indicate whether the statement is true or false
TRUE
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Which of the following tools is used to compare the income per capita across countries?
A) Purchasing power parity B) The headcount index C) The GDP deflator D) Production possibilities frontier
In the above figure, a price of $15 per dozen for roses would result in
A) equilibrium. B) a shortage. C) a surplus. D) downward pressure on prices.
Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because
A) some individuals in both countries may be made worse off because of trade. B) trade restrictions are likely to be imposed as trade grows over time. C) they do not account for the reduction in wages that occurs in both countries as a result of trade. D) in the real world, rich countries can take advantage of poor countries.
A firm will hire a unit of input up to the point where
A) the marginal cost of the input equals the marginal cost of output. B) the marginal revenue product of the input is equal to the marginal factor cost of the input. C) the price of the input is equal to the price of output. D) the marginal physical product of the input is equal to the price of output.