Farm programs that guarantee a price higher than equilibrium
a. cause shortages
b. decrease government spending
c. decrease taxes
d. raise farm property values
e. increase suburban development
D
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What are the main determinants of demand elasticity? Explain their importance.
What will be an ideal response?
The effectiveness lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.
If perfectly competitive industry B is currently realizing economic profits, we would expect that:
a. industry output will fall, good B will fall in price, and economic profits will tend to disappear. b. industry output will fall, good B will rise in price, and economic profits will tend to disappear. c. industry output will rise, good B will fall in price, and economic profits will tend to disappear. d. industry output will rise, good B will fall in price, and economic profits will tend to increase.
The difference between microeconomics and macroeconomics is that
a. microeconomics deals with only small numbers while macroeconomics is always dealing with numbers in the billions and trillions b. microeconomics deals with the economy as a whole while macroeconomics deals with individual firms c. microeconomics is concerned with the behavior of individual decision-makers while macroeconomics is concerned with behavior of entire economies d. microeconomics is only useful for small countries while macroeconomics is useful for large countries e. microeconomics is only useful for large economies like the United States while macroeconomics is only useful for small economies