Refer to Figure 5-9. Let's suppose the government imposes a tax of $50 per unit of toilet paper to bring about the efficient level of production. What happens to the market price of toilet paper?
A) It rises by more than $50 per unit.
B) It rises by $50 per unit.
C) It rises by less than $50 per unit.
D) It remains the same because the tax is imposed on producers who create the externality.
C
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If the quantity of bank reserves held at the Fed increases, ________
A) the real interest rate increases B) bank deposits decrease C) the number of loans issued by banks decrease D) inflation increases
What is the threshold age for individuals to be considered as being in the "labor force" for statistical purposes?
A) 16 B) 18 C) 21 D) Over 21
The shorter is the interval between firms' price adjustments,
A) a given unexpected increase in aggregate demand will cause a larger increase in output. B) the greater is the scope for activist policies to stabilize the economy. C) the smaller is the scope for activist policies to stabilize the economy. D) a given unexpected increase in aggregate demand will cause a smaller increase in the price level in the short run.
The economic efficiency of any process will be evaluated by
A) the proportion of marginal to non-marginal costs. B) the ratio of work done to energy supplied. C) comparing what is gained from what is sacrificed. D) the relationship of supply to demand.