If the government's provision of a subsidy is too large to counteract the entire effect of a positive externality, the:
A. total surplus will be maximized.
B. quantity consumed will become even lower.
C. quantity consumed will become too high.
D. None of these statements is true.
Answer: C
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Use the above table. If these two countries, Alpha and Beta, specialize based on comparative advantage
A) Alpha will specialize in cookies, and Beta will specialize in coffee production. B) Alpha will specialize in producing both items. C) Beta will specialize in producing both items. D) Alpha will specialize in coffee, and Beta will specialize in cookies.
The slope of a production possibilities frontier measures:
A. the opportunity cost of producing one good in terms of the other good. B. the trade-off in the consumptionof one good versus the other good C. how much of the resources must be used in order to produce one the goods. D. inefficient production of a good.
A recession is defined as a period when the
a. real GDP increases less than 3 percent. b. real GDP falls by at least 5 percent in a single quarter. c. nominal GDP declines for two consecutive quarters. d. real GDP falls for two consecutive quarters.
The economy is in equilibrium, TP = TE. Then, autonomous consumption rises. As a result, __________ rises, the __________ curve shifts __________, inventory levels unexpectedly __________, and business firms __________ the quantity of goods and services they produce
A) consumption; TE; downward; fall; increase B) consumption; TE; upward; fall; increase C) consumption; TE; upward; rise; decrease D) investment; TE; upward; fall; increase E) investment; TP; leftward; fall; increase