Economic growth may occur when
A. technology remains unchanged but unemployment increases.
B. a society acquires new resources.
C. a society decides to produce less using existing resources.
D. the society begins to produce the combination of goods society wants most.
Answer: B
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The U.S. government restricts the production of peanuts by limiting production licenses. By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted. This program has the same effect as a
A. price ceiling. B. price floor. C. opportunity cost. D. shortage. E. efficiency move.
Firms that charge a price for their output in excess of marginal cost in the short run
A) are not maximizing profits. B) cannot find buyers for their output. C) are charging a markup. D) will suffer huge losses.
Wage reduction policies are less common than layoffs because
A) workers never prefer wage reduction policies. B) workers always trust the firm to tell the truth. C) of asymmetric information. D) of adverse selection problems.
The percentage of total national income spent on health care in the United States has
A) declined rapidly since 1965. B) remained below the level of inflation. C) risen steadily since 1965. D) remained constant over the last few years.