Exhibit 7-13 Price and cost per unit curves
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In Exhibit 7-13, if the price is P3, total economic profit is maximized or economic loss minimized at the output:
A. Q1.
B. Q2.
C. Q3.
D. Q4.
Answer: C
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Which of the following components of government spending and revenue serves as an automatic stabilizer?
a. the wealth effect b. the multiplier c. unemployment insurance d. military spending e. property taxes
The U.S. government does not allow toggle switches for power windows in automobiles. The National Highway Traffic Safety Administration found that the regulation will save about two children every three years and have negligible costs because the industry will have plenty of time to incorporate new switches into future vehicles. Evaluating this rule in terms of costs and benefits, an economist most likely would conclude that:
A. it is a bad decision because the chances of a child dying (less than one per year) are so small that they can be ignored. B. we cannot tell if it is a good decision without knowing the ages of the children who might be saved by the regulation. C. it fails because it should take effect immediately, not after four years. D. it is a good decision because the benefits exceed the costs.
The World Bank defines ________ poverty as an income of less than $1.90 per day per person.
A. extreme B. severe C. relentless D. extraordinary
Because resources are limited:
A. only the very wealthy can get everything they want. B. firms will be forced out of business. C. the availability of goods will be limited but the availability of services will not. D. people must make choices.