Gains from trade can only occur when
A) marginal rates of substitutions differ across people.
B) marginal rates of substitution are equal across people.
C) indifference curves are convex.
D) people find themselves on the contract curve.
A
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Everything else held constant, increased demand for a country's exports causes its currency to ________ in the long run, while increased demand for imports causes its currency to ________
A) appreciate; appreciate B) appreciate; depreciate C) depreciate; appreciate D) depreciate; depreciate
The theory that regulators' behavior will eventually be compromised by the special interests they regulate is known as the
A) capitulation hypothesis. B) creative hypothesis. C) captive hypothesis. D) capture hypothesis.
If a state government wants to collect the maximum tax revenue from a unit excise tax, which of the following would they tax?
A. one particular smartphone model B. beef hamburgers C. luxury cars D. cigarettes