Which of the following is a problem inherent in centrally planned economies?
A) Households and firms make poor decisions in choosing how resources are allocated.
B) There is too little production of low-cost, high-quality goods and services.
C) Production managers are more concerned with satisfying consumer wants than with satisfying government's orders.
D) Exports tend to exceed imports.
Answer: B
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For a given price, a decrease in demand will decrease consumer surplus
Indicate whether the statement is true or false
Rational ignorance suggests that
a) it is easier to aim at the median voter because it is a less costly strategy for the politicians b) low voter turnout is due to a lack of understanding of the importance of political platforms c) all voters will pursue information about each issue before voting d) all voters will be ignorant on issues that are not of special interest to them
Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. GDP in year 2 is:
A. $180 billion. B. $190 billion. C. $200 billion. D. $210 billion.
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease