A recession tends to cause the federal budget deficit to ________ because tax revenues ________ and government spending on transfer payments ________
A) increase; rise; falls
B) decrease; rise; falls
C) increase; fall; rises
D) decrease; fall; rises
C
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A minimum wage increases unemployment by
A) increasing the quantity of labor demanded. B) decreasing the quantity of labor demanded. C) shifting only the labor supply curve rightward. D) shifting only the labor demand curve leftward. E) shifting the labor supply curve rightward and shifting the labor demand curve leftward.
The Lerner Index is a measure of market power that focuses on:
A) the ratio of the price of a firm's product to the price elasticity of demand for the product. B) the share of the market controlled by the X largest firms in the market. C) the sum of the squares of the market share of each firm in an industry. D) the difference between a firm's product price and its marginal costs of production.
Refer to the graph shown. In equilibrium, producer surplus is equal to:
A. 600. B. 1,200. C. 2,000. D. 1,400.
Consider a wine maker who has put her wine in bottles. The question is whether to store the wine for a marginal cost of $1 per year or to sell the wine today at a price of $10
If the interest rate is 6%, how much must the price of the wine increase in the next year to justify storing it? A) $1.66 B) $1.27 C) $0.72 D) $0.45