Which of the following is a production decision?
A. How much output the firm should produce in the long run.
B. Whether the firm should shut down or produce.
C. Whether the firm should merge with one of its rivals.
D. Whether the firm should exit or enter the market.
Answer: B
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Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
Prior-to-trade (autarky) consumer surplus equals area(s)
A. A + B + C. B. E + F. C. A + B. D. A.
Which of the following is observed in an economy during the contraction phase of the business cycle?
a. Nominal GDP begins to rise b. Real GDP remains constant c. Real GDP falls d. Productivity of resources increase e. Unemployment falls
For about the last 45 years, state and local taxes have remained relatively constant as a percentage of GDP
a. True b. False Indicate whether the statement is true or false
Which of the following tax systems could not be structured to satisfy conditions of vertical equity?
a. a proportional tax b. a regressive tax c. a progressive tax d. a lump-sum tax