When the government hires people to serve in the army, these people are no longer available to do other work. This choice illustrates the concept of
A) an incentive.
B) a social interest/private interest conflict.
C) opportunity cost.
D) marginal benefit.
C
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Refer to Figure 16-5. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely
A) increase government spending. B) decrease government spending. C) increase oil prices. D) lower interest rates. E) increase taxes.
A market that consists of only a few large firms is probably a(n):
A. monopoly. B. perfectly competitive market. C. monopolistically competitive market. D. oligopoly.
A perfectly inelastic demand implies that buyers
a. decrease their purchases when the price rises. b. purchase the same amount as before when the price rises or falls. c. increase their purchases only slightly when the price falls. d. respond substantially to an increase in price.
An external COST occurs when
A. some of the benefits derived from the production or consumption of some good or service are enjoyed by a third party. B. the production or consumption of some good or service inflicts costs on a third party without compensation. C. private costs exceed social costs. D. private costs exceed private benefits.