From the supply-side perspective, the economy may fail to reach full employment because of
A. Declining costs.
B. Taxes that are too high.
C. Lack of government regulation.
D. Production incentives.
Answer: B
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In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 40 percent of all income is
A) curve A. B) curve B. C) curve C. D) curve D.
The use of a backward-L shaped aggregate supply curve allows us to ________ in a way that other shapes would not.
A. deal with shifting curves B. consider various levels of prices C. create an equilibrium D. consider different macroeconomic points of view
In economic theory, the idea of the equimarginal principle, or consumer equilibrium, means:
a. consumers appear to be similar in their buying habits, which explains why prices are almost always in equilibrium. b. to maximize utility, consumers allocate all of their incomes among goods so as to equate the total utility of all units of goods purchased. c. to maximize utility, consumers must allocate their scarce incomes among only the cheapest products available. d. to maximize utility, consumers must allocate their scarce incomes among goods so as to equate the marginal utilities per dollar of expenditure on the last unit of each good purchased. e. the marginal utilities among luxury goods are always equal among certain high-income earners.
If the elasticity of supply of a good is equal to 0.62, then we can say that the supply curve for the good is: a. elastic
b. inelastic. c. perfectly elastic. d. perfectly inelastic.