If the size of the underground economy is large,
A) government agencies have difficulty measuring nominal and real GDP.
B) it is relatively easy to gather productivity data on many businesses.
C) measuring real GDP is relatively easy, but measuring nominal GDP is difficult.
D) measuring nominal GDP is relatively easy, but measuring real GDP is difficult.
A
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Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly. As a result of this change
A) price will be higher, output will be lower, and the deadweight loss will be eliminated. B) consumer surplus will be smaller, producer surplus will be greater, and there will be a reduction in economic efficiency. C) consumer surplus will be smaller and producer surplus will be greater. There will be a net increase in economic surplus. D) price will be higher, consumer surplus will be greater, and output will be greater.
A consumer is willing and able to buy 1,000 units of a good at $10, but the consumer's quantity demanded falls to zero if the price rises even a fraction of a cent. The consumer's demand curve is
A) horizontal and is perfectly inelastic. B) horizontal and is perfectly elastic. C) vertical and is perfectly elastic. D) downward sloping from higher prices down to $10 and then horizontal.
The share of federal government spending on healthcare has risen substantially over time. This is most likely a result of
a. medical advances that provide new, better, but often more expensive medical treatments. b. a rising population of the elderly in the economy. c. health insurance reform that will include government subsidies for health insurance for many low-to-moderate income families. d. All of the above are important factors.
An inducement to take a particular action is called
A) the marginal benefit. B) the marginal cost. C) opportunity cost. D) an incentive.