Figure 32-1
?
In Figure 32-1, there are four levels of income. G is government expenditures and TT is taxes less transfers. At which level of income does the official budget produce a surplus?
A. Y4
B. Y3
C. Y2
D. Y1
Answer: A
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Toothpicks are sold in a perfectly competitive market. The market price is currently $3 per box of one hundred toothpicks
At its current level of production, a representative firm in the toothpick industry is producing at a level of output such that long-run average cost is $3.25 per box of one hundred toothpicks. Given this information, is the toothpick industry in equilibrium? Explain.
According to public choice theory, which of the following is not a likely reason that government policy might benefit only a narrow interest group?
A. If the benefits to the narrow interest group are relatively large, they have an incentive to invest a lot of money and effort in lobbying government. B. If the costs of this policy are spread out among the general population, and are a very small burden for anyone person, then those paying the costs have little incentive to organize opposition. C. The additional rewards of a policy to the general population outweigh the additional costs that are imposed on a narrow interest group. D. Politicians follow their own self-interest and seek to maximize their reelection chances rather than promoting the best interests of society.
If both buyers and sellers expect the price of a commodity to rise in the future, it is likely that the market clearing price ________ and the equilibrium quantity ________
A) will fall, cannot be predicted B) will rise, cannot be predicted C) cannot be predicted, will fall D) cannot be predicted, will rise
The demands for labor and other input factors are called
A) derived demands, because the demand for these inputs depends on the demand for goods and services they are employed to produce. B) developed demands, because the demand for these inputs is developed from an analysis of the costs of advertising products. C) indirect demands, because the demand for these inputs is indirectly related to the costs of advertising products. D) reverse demands, because the demand for these inputs varies inversely with the demand for goods and services they are employed to produce.