Because most people prefer smartphones to flip phones, firms can improve efficiency by
A. stopping production of flip phones and starting production of smartphones.
B. stopping production of both flip phones and smartphones.
C. increasing production of both flip phones and smartphones.
D. starting production of flip phones and stopping production of smartphones.
Answer: A
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Suppose the government has declared beer to be an illegal substance and has imposed penalties on any person caught selling a beer. Buying a beer, however, remains legal
Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by A) 200 quarts. B) 300 quarts. C) 400 quarts. D) 500 quarts.
The net loss in welfare from a quota is proportionately larger than for a tariff because: a. it does not result in government revenue
b. the loss in consumer surplus is greater than the gain to producers and the government. c. it prevents nations from fully realizing their competitive advantage. d. it brings about higher prices and revenues to domestic producers.
Increases in government expenditures and large budget deficits are projected for 2014-2020 . If the economic recovery is weak and growth is sluggish during this decade, this will be
a. supportive of the Keynesian view, but inconsistent with the crowding-out, new classical, and supply-side theories. b. inconsistent with the Keynesian view, but supportive of the crowding-out, new classical, and supply-side theories. c. inconsistent with both Keynesian and non-Keynesian theories. d. supportive of both Keynesian and non-Keynesian theories.
Between 2001 and the financial collapse of 2008, U.S. federal budget deficits hovered around
A. $150 billion. B. $400 billion. C. $800 billion. D. zero.