In the table above, what is the government's sector balance?
A) a deficit of $700 billion
B) a surplus of $600 billion
C) a deficit of $100 billion
D) a surplus of #100 billion
C
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If a detrimental externality is being produced in the course of producing a good, then
a. P > MSC. b. MSC < MPC. c. incidental costs are negative. d. output is inefficiently large.
If a $2 tax per bottle of wine is imposed on wine producers, which of the following will occur?
a. The price of wine will increase, fewer bottles will be purchased, and there will be a deadweight loss from this tax. b. The price of wine will increase, more bottles will be purchased, and consumers will gain as the result of this tax. c. The price of wine will decrease, more bottles will be purchased, and there will be a deadweight loss from this tax. d. The price of wine and quantity sold will be unchanged.
Which of the following correctly states the relationship between GDP and GNP for the U.S.?
a. GDP equals GNP minus the net income of foreigners. b. GDP equals GNP plus the net income of foreigners. c. GDP equals GNP minus indirect business taxes. d. GDP equals GNP.
A good that has external benefits associated with its production will be
A) produced at the optimal level. B) underproduced. C) overproduced. D) not produced.