Over the range of output, a firm’s marginal revenue initially increases and then decreases.
Answer the following statement true (T) or false (F)
False
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Two main reasons that the deficit may increase are:
A. decreases in tax revenues and an increase in government spending. B. changes in interest rates and unemployment. C. increases in household spending and decreases in firm spending. D. decreases in tax revenues and government spending.
In a market economy, individuals have a strong incentive to develop their skills and provide others with resources, goods, and services that they value because these activities generally
a. improve the overall efficiency of the economy. b. increase aggregate output. c. lead to a higher personal income. d. provide additional tax revenue for the government.
Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?
A. The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice falls. B. The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice rises. C. The equilibrium price of apple juice rises and the equilibrium quantity of apple juice might rise or fall. D. The equilibrium price of apple juice falls and the equilibrium quantity of apple juice might rise or fall.
Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. The government can achieve the optimal outcome by
A. setting the price at P3. B. establishing a tax equal to P2 - P1 per unit of the good sold. C. providing a per-unit subsidy to consumers equal to P2 - P1. D. providing a per-unit subsidy to consumers equal to P3 - P1.