What does the assumption of perfect knowledge include?
What will be an ideal response?
It is assumed that households possess knowledge of the qualities and prices of all goods available in the market and that firms have all available information concerning wage rates, capital costs, and output prices.
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Group price discrimination has ________ consumer surplus than under ________
A) more; perfect competition B) less; perfect competition C) more; an elastic demand curve D) less; single-price monopoly
Exhibit 2-13 Production possibilities curve
In Exhibit 2-13, in terms of efficiency:
A. point A is preferred to point B. B. point A is preferred to point E. C. point A is preferred to point D. D. point B is preferred to point A.
According to dynamic tax analysis, continually increasing the tax rate will eventually
A) cause an increase in the tax base. B) have no impact on the tax base. C) cause a decrease in the tax base. D) result in an initial decrease in the tax base followed ultimately by a rise in the tax base.