In a market economy, government intervention
a. will always improve market outcomes.
b. reduces efficiency in the presence of externalities.
c. may improve market outcomes in the presence of externalities.
d. is necessary to control individual greed.
c
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It is likely that for most people:
A. coffee and non-dairy creamer are substitutes. B. coffee and tea are substitutes. C. coffee and coffee mugs are substitutes. D. coffee and Coke are complements.
The graph shows the market for cell phones. The government imposes a sales tax on cell phones at $10 a cell phone. The excess burden of the sales tax on cell phones is
A) $20,000. B) $15,000. C) $35,000. D) $7,500. E) $30,000.
An imperfectly competitive firm faces a demand curve that is ________, while a perfectly competitive firm faces a demand curve that is ________.
A. perfectly inelastic; perfectly elastic. B. horizontal; downward-sloping. C. perfectly inelastic; downward-sloping. D. downward-sloping; perfectly elastic.
Economic growth in Lillian’s country has been very slow. Which of the following offers the most likely explanation for this?
a. The population is increasing rapidly. b. The standard of living is low. c. Too much of the nation’s resources are being invested in technology. d. People are saving too much of their income instead of consuming.