A competitive equilibrium fails to be a Pareto Optimum with a distorting tax because
A) the consumer's budget constraint has an additional kink.
B) the firm is no longer maximizing profits.
C) the government wastes its revenue.
D) the consumer faces a different effective wage than the firm.
D
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Refer to Table 2.3. Assume that 2010 is the base year. The GDP deflator for 2010 is
A) 67.1. B) 84.5. C) 100.0. D) 118.3.
Diseconomies of scale are also known as
a. Increasing returns to scale b. Decreasing returns to scale c. Constant returns to scale d. None of the above
The decrease in investment that occurred as a result of banks being unwilling to lend to businesses after the collapse of the housing bubble caused aggregate:
A. demand to increase. B. demand to decrease. C. supply to increase. D. supply to decrease.
The expression "There's no such thing as a free lunch" means
a. in an exchange, if one person gains, someone else must lose. b. each person must pay for exactly what he or she receives. c. the use of resources to meet one need means that those resources can no longer be used to meet another need. d. in an exchange, if one person gains, someone else must lose and equal amount.