If the government wants to encourage the consumption of a particular good, they should enact:
A. a subsidy to buyers, since they deserve the benefit more than the producers.
B. a subsidy on either buyers or sellers, since they will both have the same effect on the market.
C. a subsidy to buyers, since they want to affect consumption of the good.
D. a subsidy to sellers, since they want more to be produced and offered for sale.
Answer: B
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Frictional unemployment increases when
A) real GDP decreases and the unemployment rate rises. B) the number of workers who quit one job to find another increases. C) discouraged workers drop out of the work force. D) workers are replaced by machines and the unemployed workers do not have the skills to perform new jobs.
The median voter theorem will be an accurate predicator of the outcomes of elections
A) when a majority of voters have preferences very similar to those of the median voter. B) only when voter turnout is very high. C) when a majority of voters have preferences different from those of the median voter. D) regardless of whether preferences among voters are similar or different from those of the median voter.
Politicians and citizens may often choose policies that reduce economic efficiency because they are perceived as “fairer.”
Answer the following statement true (T) or false (F)
The change in a firm's total revenue due to selling an additional unit of output is known as
a. marginal revenue b. average revenue c. price d. marginal cost e. marginal revenue product