Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?
A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others.
B) Failure to do this could lead to an inequitable allocation of goods and services produced.
C) Failure to do this will lead to drastic shortages of all goods and services.
D) Failure to do this could reduce efficiency and lead to an inequitable allocation of output.
Answer: A
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Several firms in an industry laid off their workers. Assuming all else equal, this will lead to a ________
A) higher rate of output in the industry B) higher rate of capacity utilization in the industry C) lower rate of capacity utilization in the industry D) higher real wage in the industry
Cigarettes are highly addictive and therefore have a very low elasticity of demand. A $2.00 increase in the national sales tax on cigarettes would likely cause the price paid by buyers of cigarettes to
A) increase by more than $1.00 but less than $2.00. B) increase by $2.00. C) increase by more than $2.00. D) increase by less than $1.00. E) remain unchanged.
A person is more likely to increase labor supply in response to an increase in the real wage, the ________ is the income effect and the ________ is the substitution effect
A) larger; larger B) larger; smaller C) smaller; larger D) smaller; smaller
Year 1 nominal GDP is
A) $200. B) $270. C) $310. D) $390.