The clearest sign of inflation would be a(n)
a. increase in the price level.
b. increase in the quantity of total final output.
c. decrease in the quantity of total final output.
d. simultaneous increase in both output and prices.
a
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Which of the following is an important difference between government and privately-owned enterprises?
A) Government can distribute goods without employing discriminatory rationing criteria. B) Government can more easily use negative incentives to obtain resources. C) Government does not produce exchangeable commodities or services. D) Government provides services at a lower opportunity cost. E) Government tends to pay close attention to the varying preferences of the people.
When Pigouvian subsidy is imposed on a market with a positive externality, total surplus:
A. increases more than the increase in consumer surplus. B. decreases less than the increase in consumer surplus. C. decreases more than the decrease to producer surplus. D. increases less than the decrease to producer surplus.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
When a rational consumer has stopped buying, she or he will have allocated a limited budget so that the marginal utility per good will be the same.
Answer the following statement true (T) or false (F)