Which of the following is a Pareto improvement?
A) A monopolist loses its monopoly when a government policy allows another firm to enter the market, resulting in lower prices and higher quantity available for consumers.
B) A government policy is implemented that results in the middle class being better off, and the very rich only have to pay a little bit more in taxes.
C) A government policy removes a market failure.
D) None of the above.
D
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The loss of the profit motive by a publicly-owned natural monopoly causes which of the following to happen?
A. Increased pressure from the public to turn a profit B. Increased pressure from the public to cut costs C. Decreased incentive to improve efficiency D. Increased motivation to cut costs
Economists usually use the term "recession" to refer to: a. any slowdown in the growth of real GDP
b. zero real GDP growth. c. two or more consecutive quarters of declining real GDP. d. a reduction in nominal GDP lasting more than six months.
Dara lives in an agricultural society with 2 million acres of farmable land. The population of Dara’s country is growing at a rate of 3 percent. Assuming there is no way to increase the amount of land available, the law of diminishing returns means that ______.
a. output will fall as less land is available per worker b. output will rise, but by ever shrinking amounts c. the country’s output will rise by about 3 percent annually d. innovation will increase output to meet demand
In the early 1990s, economists became alarmed over the national debt because it
A. was larger than three months’ GDP. B. was growing faster than GDP. C. had reached twice the size of GDP. D. was growing faster than private debt.