When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,
a. consumers have a strong incentive to search out those firms offering them the best deal.
b. private producers of such goods will have little incentive to control costs and provide them at low prices.
c. goods and services will only be supplied if consumers are willing to pay an amount sufficient to cover their production costs.
d. the invisible hand will direct consumers and producers toward an efficient level of output.
B
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Even though a perfect price discriminator can extract all of the consumer surplus, how can it be efficient?
What will be an ideal response?
A rise in marginal income tax rates would likely increase the size of the underground economy
a. True b. False
For a given price level, which of the following correctly indicates how to find the quantity of real GDP demanded?
a. Where the consumption function crosses the savings curve b. Where the demand for investment curve crosses the labor supply curve c. Where real GDP equals aggregate expenditure d. Where the labor supply curve crosses the consumption function
Which of the following is not one of the "slippages" between changes in output and changes in the unemployment rate?
A. The percentage increase in the number of jobs is less than the percentage increase in output. B. The labor force increases when output increases. C. The change in the number of jobs and the change in the number of people employed are not equal. D. As the size of the labor force increases, the interest rate increases, and therefore output falls.