The special-interest groups model of government explains why:
A. the government fails to use resources efficiently.
B. the government protects endangered species.
C. there are subsidies to farmers.
D. All of these could be explained by this model.
Answer: D
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Refer to Figure 3-4. At a price of $10, how many units will be sold?
A) 200 B) 400 C) 600 D) 800
The slope of a horizontal line is
a. infinitely large b. zero c. positive d. negative e. infinitely small
Supply-side economics is based on the theory that:
A. budget deficits will stimulate demand, output, and employment. B. budget deficits will lead to higher interest rates, which will weaken their expansionary impact. C. higher tax rates will increase tax revenues. D. increases in aggregate supply lower the price level.
When supply and demand are both elastic, a price floor will cause a:
A. larger surplus than when supply and demand are inelastic. B. larger shortage than when supply and demand are inelastic. C. smaller surplus than when supply and demand are inelastic. D. smaller shortage than when supply and demand are inelastic.