The long-run effect of increasing government budget deficits includes
A. no change in equilibrium real GDP.
B. an increase in the price level.
C. a redistribution of output from privately provided goods to government provided goods.
D. all of these.
Answer: D
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La Dila Corp . decided to sponsor an AIDS awareness campaign when it discovered that its rival had been sponsoring several fund-raising events for AIDS-afflicted children. This is an example of ________
A) bounded rationality B) pure altruism C) impure altruism D) consumerism
When a unit tax of $2 is levied on a product
A) the entire $2 is paid by the consumer. B) the entire $2 is paid by the producer. C) both the consumer and producer pay $2 each. D) the consumer pays part of the $2 and the producer pays the rest.
Which of the following is a free rider?
A. Butch breeds the feared pit bulls, and his neighbors now erect fences around their property. B. Fred watches many public television programs, but he has never sent in a contribution. C. Barry steals candy from the store where he works. D. Betty regularly rides public transportation.
It is estimated that the price elasticity coefficient for farm products is 0.2. Therefore, in order for consumers to increase their purchases of farm products by 10 percent, the prices of these products would have to fall:
A. 20 percent B. 40 percent C. 50 percent D. 80 percent