If you were a liberal member of Congress during a time of unemployment, which fiscal policy would be most appealing to you?
A. decrease government spending
B. increase government spending
C. decrease taxes
D. increase taxes
B. increase government spending
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The supporters of a proposal to increase marginal taxes on those earning over $200,000 a year say this change would generate $100 billion in new tax revenues. A supply-side economist would argue that the actual revenue raised will be
A) exactly $100 billion because there are no offsetting factors to a tax increase. B) more than $100 billion, because lower income people will work harder when they perceive the tax system to be fairer. C) more than $100 billion because interest rates will also be affected. D) less than $100 billion because some people will respond by working less.
Pick the true statement below:
A) All scarce goods are normal goods. B) All scarce goods are inferior goods. C) A normal goods is a scarce good. D) An inferior good is a bad.
If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the firm will
A) incur an economic loss. B) make zero economic profit, that is, its owners make a normal profit. C) make an economic profit of $4 million. D) make an economic profit of $16 million.
There is only one firm in a monopoly
Indicate whether the statement is true or false