Macroeconomics is best described as the study of:
A. very large issues.
B. the choices made by individual households, firms, and governments.
C. the nation's economy as a whole.
D. the relationship between inflation and wage inequality.
Answer: C
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Because of the United States' long-standing trade deficit with Japan, the supply of U.S. dollars in Japan has increased. Which of the following is true about this situation?
A. The trade deficit will continue to increase in size as Japan gains more U.S. dollars and economic strength. B. We cannot say anything for sure about the trade deficit other than that it exists. C. The value of the U.S. dollar will decrease in terms of the yen, ceteris paribus, thereby reducing the trade deficit. D. Trade restrictions on Japanese imported goods are ultimately the only way to reduce the trade deficit.
The socially optimal amount of pollution abatement occurs where society's marginal:
A. benefit of abatement exceeds its marginal cost of abatement by the greatest amount.
B. benefit of abatement equals its marginal cost of abatement.
C. benefit of abatement is zero.
D. cost of abatement is at its maximum.
Suppose that a monopoly computer chip maker increases production from 10 microchips to 11 microchips. If the market price declines from $30 per unit to $29 per unit, marginal revenue for the eleventh unit is:
a. $9. b. $19. c. $1. d. $29.
Sometimes, public goods whose benefits are less than their costs still get produced because:
A. The marginal benefit is still larger than the marginal cost B. Of externalities in production C. The benefits accrue to politically powerful government officials and their constituents D. Of market failures