The idea that creating incentives for individuals and firms to increase productivity leading to an increase in long-run aggregate supply is
A. the Ricardian equivalence theorem.
B. supply-side economics.
C. demand-side economics.
D. laissez-faire economics.
Answer: B
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When a good ends up over consumed and depleted, we can assume it is a:
A. common resource. B. private good. C. public good. D. scarce good.
The GDP growth rate is report at annualized rate. This means each quarter’s growth rate is ______ and reported as if the economy had the same growth rate for the entire year.
a. divided by 12 b. multiplied by 4 c. divided by 4 d. multiplied by 12
Economic profit is zero when a firm's revenues just cover its economic cost.
Answer the following statement true (T) or false (F)
Refer to the diagram in which S is the market supply curve and S 1 is a supply curve comprising all costs of production, including external costs. Assume that the number of peopleaffected by these external costs is large. If the government wishes to
establish an optimal allocation of resources in this market, it should:
A. not intervene because the market outcome is optimal.
B. subsidize consumers so that the market demand curve shifts leftward.
C. subsidize producers so that the market supply curve shifts leftward (upward).
D. tax producers so that the market supply curve shifts leftward (upward).