A type of public policy set in response to rising prices of a basic necessity, such as food, might be:
A. to make it illegal to charge higher prices for those goods.
B. to hire more producers of those goods.
C. to subsidize the price of those goods.
D. All of these are ways government can try to address rising prices of a basic necessity.
D. All of these are ways government can try to address rising prices of a basic necessity.
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If a poor family has three children in public school and a rich family has two children in private school, the ability-to-pay principle would suggest that
a. the poor family should pay more in taxes to pay for public education than the rich family. b. the rich family should pay more in taxes to pay for public education than the poor family. c. the benefits of private school exceed those of public school. d. public schools should be financed by property taxes.
The production possibilities curve shows:
A. the maximum amount of one good that can be produced for every possible production level of the other good. B. how increasing the resources used to produce one good increases the production of the other good. C. how increasing the production of one good allows production of the other good to also rise. D. the minimum amount of one good that can be produced for every possible production level of the other good.
Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. This indicates that there is
A. a positive externality. B. a negative externality. C. regressive taxation of the product. D. a public good which should be produced.
The idea that the demand for auto workers stems from the demand for automobiles is
A. the value of the marginal product of auto workers. B. derived demand. C. output demand. D. indirect demand.