As a possible approach to eliminating the government budget deficit, increasing taxes for everyone would
A. mean only a small increase in taxes.
B. lead to a large increase in taxes for every worker.
C. transfer more goods and services to the government sector.
D. lead to an inflationary gap.
Answer: B
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Define the term deadweight loss. Will there be a deadweight loss if a good's marginal cost exceeds its marginal value? Explain.
What will be an ideal response?
Refer to the scenario above. If both nations decide to trade, which of the following statements is true?
A) Hawaii should export both tea and coffee. B) Hawaii should import both tea and coffee. C) Hawaii should export tea and South Carolina should export coffee. D) Hawaii should export coffee and South Carolina should export tea.
Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase?
A) an increase in the price of sheep B) a decrease in the price of cattle C) an increase in the price of sheep feed D) an increase in the demand for cattle
The distinguishing characteristic of a public good is
A) noncompetitive production. B) durability. C) exclusivity. D) nonrival consumption.