A tax imposed on a good can:
A. discourage consumption of the good.
B. encourage production of the good.
C. increase the supply of complementary goods.
D. prevent the market from reaching an efficient equilibrium.
A. discourage consumption of the good.
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During the early 1920s, Germany experienced
A) negative inflation as a result of high money creation. B) hyperinflation as a result of high money creation. C) moderate price changes as a result of a recession. D) hyperinflation as a result of rapidly increasing demand for money. E) hyperinflation as a result of low money creation.
By reducing its output compared to a competitive market, a monopoly leads to
A) a more efficient use of resources. B) external benefits. C) external costs. D) a deadweight loss.
Because unregulated natural monopolies earn economic profits greater than zero in the long run, but cannot attract new entrants into the industry:
A. government agencies often regulate the number of firms that compete against natural monopolies. B. government agencies often regulate the price natural monopolies can charge. C. natural monopolies often go out of business. D. natural monopolies are outlawed.
An example of a transaction that will be a surplus item on the U.S. balance of payments is
A) a U.S. resident purchasing French wine. B) a French subsidiary's plant in New Jersey purchasing parts from the main plant in Paris. C) a gift of wheat from the U.S. government to India. D) a tourist from Germany buying a ticket to fly from New York to Chicago on American Airlines.