When an economic unit limits the scope of its productive efforts instead of trying to produce everything it needs, it is engaging in
a. exchange.
b. comparative production.
c. specialization.
d. self-sufficiency.
c. specialization.
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The figure above shows the market for the chemical hydrogen sulfide, the production of which creates an external cost. The government imposes the pollution tax shown in the above figure. What quantity is produced after the pollution tax is imposed?
A) zero pounds B) 80 million pounds C) 160 million pounds D) more than 160 million pounds E) more than 80 million pounds and less than 160 million pounds
Which of the following lists correctly identifies the four expenditure categories of GDP?
a. consumption, government purchases, investment, net-exports b. consumption, investment, depreciation, net-exports c. consumption, saving, investment, depreciation, d. consumption, government purchases, investment, savings
Two firms compete as a Stackelberg duopoly. The inverse market demand they face is P = 62 ? 4.5Q. The cost function for each firm is C(Q) = 8Q. The outputs of the two firms are:
A. QL = 35; QF = 6. B. QL = 6; QF = 3. C. QL = 48; QF = 24. D. None of the answers is correct.
One implication of the Phillips curve analysis is that: a. unemployment rates below the natural rate are only possible in the long run
b. unemployment rates below the natural rate lead to falling rates of inflation in the long run. c. if inflationary expectations are accurate, the economy is on the short-run Phillips curve but not on the long-run Phillips curve. d. unemployment rates below the natural rate may be achieved only with rising inflation rates. e. the natural rate of unemployment is strictly a short-run phenomenon.