Answer the following statement(s) true (T) or false (F)
1. Welfare effects are the gains and losses associated with government intervention in markets
2. Without a tax, tax revenues are zero.
3. When a tax gets larger, deadweight loss gets much smaller.
4. Other things being equal, the more elastic the demand or the supply curve, the smaller the eadweight loss.
5. The Law of Increasing Opportunity Cost refers to the condition where the opportunity cost of producing additional units of a good rises as society produces more of that good
1. True
2. True
3. False
4. False
5. True
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Restructuring in Texas went more smoothly than restructuring in California
Indicate whether the statement is true or false
An example of a transaction that will be a surplus item on the U.S. balance of payments is
A) a U.S. resident purchasing French wine. B) a French subsidiary's plant in New Jersey purchasing parts from the main plant in Paris. C) a gift of wheat from the U.S. government to India. D) a tourist from Germany buying a ticket to fly from New York to Chicago on American Airlines.
One aggregates individual demand curves by adding
A. vertically. B. horizontally and subtracting vertically. C. horizontally. D. vertically and subtracting horizontally.