List the four possible responses to the Social Security financing gap.
What will be an ideal response?
The four possible responses are to cut benefits, perhaps with an increase in the retirement age or a decrease in benefits for higher-income workers; raising the payroll tax from the current level of 6.2 percent for employer and employee (or raising the cap); funding with general tax revenues; or privatization, which converts part of the Social Security program into a kind of defined contribution plan.
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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
Given the table below, what is average total cost when 200 units of output are produced? 
A. $4.00 B. $2.30 C. $2.50 D. $4.80 E. none of the above
Given the indifference curves for an individual as shown below, if the price of good Y = $1, it can be determined that two points on his or her demand curve for good X are:
A. (PX = $1, QdX = 10); (PX = $2, QdX = 14)
B. (PX = $1, QdX = 7); (PX = $.50, QdX = 14)
C. (PX = $.50, QdX = 7); (PX = $1, QdX = 10)
D. (PX = $2, QdX = 20); (PX = $1, QdX = 10)
Resources are allocated efficiently when
A. economic profits are zero. B. the market produces what people want. C. output is distributed in an equitable fashion. D. output is produced in a sustainable fashion.