Refer to the above figure. The firm is currently producing at Q1. The firm should
A. increase production.
B. reduce production.
C. shut down.
D. leave production as it is.
Answer: D
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Which of the following describes the relationship among income, disposable income, taxes, and transfer payments?
a. Taxes plus transfers equal income plus disposable income b. Disposable income equals income divided by the sum of taxes and transfers c. Disposable income equals income minus taxes plus transfers d. Disposable income equals income plus taxes plus transfers e. Taxes plus transfers equal disposable income minus income
If new legislation allowed patients to sue their health-maintenance organization (HMO), we would expect the supply curve for HMO-provided health care to shift to the left and the price of such coverage to rise
Indicate whether the statement is true or false
A ______ can be viewed as a negative tax.
a. surplus b. deadweight loss c. subsidy d. supply curve
Economists before Keynes assumed that equilibrium GDP occurred
A. automatically. B. only with the help of government stabilization. C. if spending was generally greater than output. D. only in socialist economies with central planning.