When actual output is less than potential output there is a(n):
A. budget surplus.
B. recessionary gap.
C. trade deficit.
D. budget deficit.
Answer: B
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The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase
At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is ________ than the equilibrium quantity and there is a ________ of jeans. A) greater; surplus B) greater; shortage C) less; surplus D) less; shortage
The problem with the separation of ownership from control is that
A) the owner in a proprietorship may not always act in the profit-maximizing fashion because he or she may not have the experience or expertise that professional managers have. B) the managing partner of a firm may not always behave in the way that other managers would if they were the managing partners. C) the managers of the firm can make decisions that reduce the wealth of the owners while not reducing their own wealth. D) the owners of firms may not always know the best way to run a firm, yet they are the ones who elect the managers of the firm.
Opportunity cost is the
A. cost incurred when one fails to take advantage of an opportunity. B. cost incurred in order to increase the availability of attractive opportunities. C. cost of the best option forgone as a result of choosing an alternative. D. drudgery of the undesirable aspects of an option.
The total burden of the tax is
A. the excess burden created by the tax minus the revenue collected from the tax. B. the ratio of the revenue collected and the excess burden created by the tax. C. the revenue collected from the tax minus the excess burden created by the tax. D. the sum of the revenue collected by the tax and the excess burden created by the tax.