The theory of consumer choice is to demand as the theory of
a. public goods is to supply.
b. oligopoly is to supply.
c. the competitive firm is to supply.
d. comparative advantage is to supply.
c
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Compensation of losers from opening an economy to international trade is not common because:
A) losers don't lose so much that they would require to be compensated. B) the loss is made up through the availability of a wider array of goods and services. C) it is difficult for governments to carry out such compensation policies. D) the government will have to transfer huge amounts of money to compensate losers.
A supply shock that reduces labor productivity
A) causes accelerating inflation if the Fed attempts to maintain the original output level. B) will increase real wages if nominal wages are flexible. C) will reduce the level of output at the natural level of real GDP even if employment does not decline. D) A and C.
The double taxation of capital gains can be justified _____
a. on the ability-to-pay principle b. on efficiency grounds c. on the grounds that government needs more revenue d. on the benefit principle
Government intervention always reduces monopoly deadweight loss
a. True b. False Indicate whether the statement is true or false