Refer to the information provided in Figure 34.1 below to answer the question(s) that follow.
Figure 34.1Refer to Figure 34.1. If the economy is open and the government increases spending by 25, the new equilibrium output is
A. 100.
B. 118.75.
C. 125.
D. 137.50.
Answer: B
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If the backward-bending supply curve for labor has relevance for public finance, it is because _____
a. at really high wage rates there will be insufficient labor to meet aggregate demand b. there is a trade-off between leisure and labor c. income taxes do no raise sufficient revenue to pay for public goods because individuals consume too much leisure d. taxpayers are not receiving as much utility from public sector output as they are losing through the income effect associated with income taxes
It was the banking panic of _____ that convinced Congress to establish the Federal Reserve System
a. 1890. b. 1929. c. 1907. d. 1863. e. 1921.
Moving downward along an indifference curve causes a(n)
A. reduction in the total utility a consumer receives. B. loss in the marginal utility of one good but an equal increase in the marginal utility of the other good. C. increase in the marginal utility of both goods. D. decrease in the price of one good and an increase in the price of the other good.
Suppose a perfectly competitive ukulele factory can produce 35 ukuleles at an output at which marginal cost equals marginal revenue. The price per ukulele is $1300 and the average total cost is $1500. What is the profit or loss that this furniture
factory is earning? A) $700.00 B) -$7,000.00 C) -$1,050.00 D) -$450.00