Refer to the information provided in Figure 16.1 below to answer the question(s) that follow. 
Figure 16.1 Refer to Figure 16.1. The efficient amount of fertilizer is
A. zero because any level of production involves an external cost.
B. 50 bags.
C. 60 bags.
D. indeterminate from this information.
Answer: B
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In the above figure, if the budget line shifts from RT to RS, the substitution effect is illustrated by the move from
A) a to b. B) a to c. C) b to c. D) T to S.
Double counting in the resource cost-income approach to GDP refers to
a. corporate income being taxed twice b. the amount of income taxes paid to states that is taxable by the federal government c. calculating GDP twice using the income and expenditures methods d. adding the value of exports to GDP and subtracting the value of imports e. counting the total value of a final output in addition to the value of the inputs used to make it
The real rate of interest is
A) equal to the nominal rate of interest less the anticipated rate of inflation. B) equal to the nominal rate of interest plus the anticipated rate of inflation. C) found by taking the nominal rate of interest and dividing it by the actual rate of inflation. D) found by taking the nominal rate of interest and adding the actual rate of inflation.
In the classical model, the supply of funds to the loanable funds market comes from
a. household saving and the government's budget surplus, if any b. net taxes c. household saving and the government budget deficit, if any d. planned investment e. total income