The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that
a. expansion of output in one industry means expansion cannot occur in another industry.
b. expansion of output in one industry means output in another industry must contract.
c. output cannot be increased in any industry.
d. output of all industries must contract until more resources are found.
b
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The above figure shows the market for apples. If a consumer group convinces the government to set a maximum price of $2 per pound, then
A) 300 pounds of apples will be sold at $2. B) no apples will be supplied. C) no apples will be demanded. D) there will be a shortage of 100 pounds of apples.
The demand curve for a monopolist is
A) the industry demand curve. B) the same as the demand curve for a perfectly competitive firm. C) a perfectly inelastic demand curve. D) a unitary elastic demand curve.
Autonomous consumption is defined as:
a. the level of consumption that depends only on the exchange rate. b. the consumption expenditures incurred by the government. c. the level of consumption that does not depend on income. d. an equilibrium condition that needs to be met for the aggregate expenditure model to work. e. the part of consumption that is related to investment.
An example of a regressive tax is the
A) corporate income tax. B) personal income tax. C) Social Security tax. D) state inheritance tax.