Price ceilings set below the equilibrium create:
A. externalities.
B. unemployment.
C. shortages.
D. surpluses.
Answer: C
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In a production possibilities frontier graph, the cost of producing more units of a good is measured by the
A) dollar value of the additional output. B) area in the arc between the PPF and a straight line drawn between the starting point and the ending point. C) dollar value of the resources used to produce the good. D) amount of the other good or service that must be forgone. E) None of the above answers is correct.
Why is the price elasticity of demand generally a negative number?
What will be an ideal response?
An increase in available resources, or a technological advancement that enhances the productivity of one or more types of resources, can shift the PPF outward and lead to economic growth
Indicate whether the statement is true or false
Supply-side economists argue that
A. higher tax rates can lead to lower tax revenues. B. lower tax rates lead to a drop in real Gross Domestic Product (GDP). C. higher tax rates lead to increased productivity. D. lower tax rates always lead to lower tax revenues.