The question "Should children receive free lunch at school?" is an example of which fundamental economic question?
A. The What to Produce question.
B. The Why to Produce question.
C. The How to Produce question.
D. The For Whom to Produce question.
Answer: D
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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
Labor is available at a wage of $10. The last worker hired by Cal’s Corn Farm added 20 ears of corn, which Cal has priced at four ears for $1. What advice would you give Cal?
What will be an ideal response?
Technological change leads to unemployment
a. True b. False Indicate whether the statement is true or false
Suppose that flu shots create a positive externality equal to $9 per shot. Further suppose that the government offers a $9-per-shot subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.