What is the marginal cost rule of specialization?
The marginal cost rule of specialization states that an individual/economy should specialize in the production of the good in which the individual's/country's marginal cost of production is lower.
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If demand is downward sloping and there is tax on the good, Consumer surplus equals
a. The area between the demand curve and the price, up to the equilibrium quantity. b. Total surplus minus producer surplus. c. Total surplus minus producer surplus and government tax revenue. d. Total surplus minus producer surplus, government tax revenue, and dead-weight loss.
Which type of tariff is forbidden in the United States on Constitutional grounds?
A) import tariff B) export tariff C) specific tariff D) prohibitive tariff E) import quota
Which of the following statements is true of government spending?
a. An increase in government spending raises the equilibrium level of income by a multiple of the original spending increase. b. Government spending is a part of monetary policy, not fiscal policy. c. A decline in government spending brings about an expansion in the economy. d. An increase in government spending increases the recessionary gap in the economy. e. An increase in government spending shifts the aggregate demand curve downward by a fraction of the rise in government spending.
The CPI in 1974 equaled 0.49. The CPI in 1975 equaled 0.54. The rate of inflation between 1974 and 1975 was ________ percent.
A. 5.0 B. 10.2 C. 5.4 D. 9.3