Gross domestic product (measured in real dollars) is an important social tool because it provides
What will be an ideal response?
policy makers with information about the economy's current rate of output and the direction of recent changes.
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Which of the following would cause an increase in the supply of wheat?
a. an increase in fertilizer costs b. a decrease in the price of bread c. a decrease in the price of corn d. an increase in land prices e. an expectation that the price of wheat will be higher next period
As a result of legislation to establish a floor price for milk, most dairy farmers will
a. end up earning a normal rate of return in the long run b. end up earning a zero rate of return in the long run c. end up earning a negative rate of return in the long run d. benefit from the increased cost of specialized resources used in dairy farming e. suffer if they own specialized resources at the time the legislation is passed
A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true?
a. The pollution will be created by those least willing and able to pay the damages. b. The pollution will be created by those most willing and able to pay for the right to pollute. c. The funds collected by the government will be enough to compensate any individuals harmed by the pollution. d. Pollution will increase from zero to 1,000 units per day.
Competing broadcasting networks are motivated to choose socially optimal programs
Indicate whether the statement is true or false