A higher opportunity cost of producing a good increases the supply of that good.
a. true
b. false
Answer: b. false
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Refer to Table 2.4. The GDP deflator for 2011 is
A) 86.5. B) 115.6. C) 135.1. D) 156.3.
When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,
a. consumers have a strong incentive to search out those firms offering them the best deal. b. private producers of such goods will have little incentive to control costs and provide them at low prices. c. goods and services will only be supplied if consumers are willing to pay an amount sufficient to cover their production costs. d. the invisible hand will direct consumers and producers toward an efficient level of output.
Figure 4-7
Refer to . The supply curve S1 and the demand curve D indicate initial conditions in the market for gasoline. A $.60-per-gallon excise tax on gasoline is levied. How much revenue does the $.60-per-gallon tax generate for the government?
a.
$40 billion
b.
$48 billion
c.
$50 billion
d.
$60 billion