Which of the following is an example of an expansionary fiscal policy?
A. the federal government increasing the marginal tax rate on incomes above $200,000
B. the federal government increasing the amount of money spent on public health programs
C. the federal government reducing pollution standards to allow firms to produce more output
D. the Fed selling government securities in the open market
Answer: B
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The price elasticity of demand for a variable input will be greater
A) the fewer substitutes there are for the final product. B) the easier it is for a particular input to be substituted for by other inputs. C) the lower the price elasticity of supply of all other inputs. D) the smaller the proportion of total costs accounted for by a particular variable input.
Refer to the above table. How do we know that this is not a competitive firm?
A) The marginal physical product decreases as the amount of labor hired increases. B) The marginal revenue changes as output changes. C) The marginal revenue product decreases as the amount of labor increases. D) Marginal physical product cannot be computed for competitive firms.
Appendix: Each partner in a simple profit-sharing contract that splits the independently verifiable sales revenue minus unobservable cost has an incentive
a. to reject an automatic renewal of the contract b. to understate fixed cost c. to overstate avoidable cost d. to understate customer loyalty for repeat purchases e. to renew the partnership contract
Which of the following is true?
a. Once the equilibrium price and output is reached, all the mutually beneficial trade opportunities between suppliers and demanders will have taken place, and the sum of consumer and producer surplus is maximized. b. The deadweight loss of a tax is the difference between the lost consumer and producer surplus and the tax revenue generated. c. Those goods that are heavily taxed often have a relatively inelastic demand curve in the short run, so that the burden falls mainly on the buyer, and the deadweight loss to society is smaller than if the demand curve was more elastic. d. All of the above are true.