If the marginal utility of a gallon of milk to consumers is $2.50 and the MC of producing the gallon of milk is $1.50, then
a. the value of the resources used up in producing one more gallon of milk would be $1 less than the money value of the additional gallon to consumers.
b. society could be made better off by expanding the output of milk.
c. resources are not being used most efficiently.
d. All of the above are true.
d
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Demand for a necessity, such as food, is
a. both income and price inelastic b. income inelastic and price elastic c. income elastic and price inelastic d. both income and price elastic e. income elastic and perfectly price inelastic
Which of the following is a positive economic statement?
a. reducing unemployment should be the highest priority of the federal government. b. a reduction in the payroll tax will reduce the unemployment rate. c. corporations should be prohibited from laying off workers during a recession. d. the current unemployment rate is too high.
In a repeated prisoner's dilemma, players:
A. always play their dominant strategy. B. can sustain cooperation by playing their dominant strategy. C. can sustain cooperation by employing a tit-for-tat strategy. D. never learn to play their dominant strategies.