GDP can be used as a(n)
A. extremely accurate measure of economic welfare.
B. rough gauge of economic activity over time.
C. precise measure of inflation.
D. accurate measure of a nation's international economic activities.
Ans: B. rough gauge of economic activity over time.
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Refer to the figure above. What is the consumer surplus after Lithasia opens up to free trade?
A) $1 B) $12 C) $15 D) $32
If the government places a $1500 tax on each hybrid car sold
A) consumers will stop buying hybrid cars. B) the supply curve will shift left by up to $1500, depending on the price elasticity of demand. C) the supply curve will shift to the right by $1500. D) None of the above.
In a progressive income tax system,
A) the marginal tax rate exceeds the average tax rate. B) the average tax rate exceeds the marginal tax rate. C) high income earners pay a lower percentage of their income in taxes than do low income earners. D) the tax rate depends solely on how long an individual has been in the labor force.
Assume milk is used to produce ice cream. Ceteris paribus, a decrease in the price of milk will cause the equilibrium price of ice cream to
A. Increase and the equilibrium quantity of ice cream to increase. B. Decrease and the equilibrium quantity of ice cream to increase. C. Decrease and the equilibrium quantity of ice cream to decrease. D. Increase and the equilibrium quantity of ice cream to decrease.