In this graph, at point e1, output level is ______.
a. above the potential
b. below the potential
c. at the potential
d. not shown
a. above the potential
You might also like to view...
A person holding dollar deposits during the devaluation of the dollar would
A) enjoy a monetary gain. B) see the foreign currency value of dollar assets increase by the amount of the exchange rate change. C) shift their wealth into domestic investments. D) suffer a monetary loss and see the foreign currency value of dollar assets decrease by the amount of the exchange rate change. E) see no change in their investments.
Suppose that Company A's railroad cars pass through Farmer B's corn fields. The railroad causes an externality to the farmer because the railroad cars emit sparks that cause $1,500 in damage to the farmer's crops. There is a special soy-based grease that the railroad could purchase that would eliminate the damaging sparks. The grease costs $1,200 . Suppose that the farmer has the right to
compensation for any damage that his crops suffer. Assume that there are no transaction costs. Which of the following characterizes the efficient outcome? a. The railroad will continue to operate but will pay the farmer $1,500 in damages. b. The railroad will purchase the grease for $1,200 and pay the farmer nothing because no crop damage will occur. c. The farmer will incur $1,500 in damages to his crops. d. The farmer will pay the railroad $1,200 to purchase the grease so that no crop damage will occur.
If we want to gauge the sacrifice made by a taxpayer, we should use the
a. average tax rate. b. marginal tax rate. c. lump-sum tax rate. d. sales tax rate.
The cost disease of the service sector is evidenced by
A. a failure of the market mechanism. B. increased quality of public and private services. C. dramatic increases in municipal budget burdens for education, health care, and police and fire protection. D. the increased productivity in the services area.