The greater the magnitude of the external benefits of production,
a. The larger is the deadweight loss from overproduction
b. The greater would be the optimal tax.
c. The less the private market solution would deviate from the socially efficient level of output.
d. All of the above are true.
a
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If the short run elasticity of demand for widgets is 1.1 and the long run elasticity of demand for widgets is 3.6, a decrease in price will ____ total revenue in the short run and ____ total revenue in the long run. a. Increase; increase
b. Increase; decrease. c. Decrease; increase. d. Decrease; decrease.
Why is GDP not a good measure of aggregate welfare?
A. GDP includes the value of intermediate goods B. trade between countries is not included in GDP C. GDP does not include the value of production done in the home D. the government calculates GDP
If you wish to maintain a constant purchasing power when you retire, you should choose retirement income options that are:
A. inflated. B. indexed. C. deflated. D. nominal.
In monopolistic competition, a firm
A. Has a standardized product that all firms produce. B. Has no market power. C. Captures significant economies of scale. D. Has a downward-sloping demand curve.