When those that do not contribute to the costs of a public good are denied use, this is a case of
A. exclusion.
B. being nonrival.
C. price discrimination.
D. infeasibility.
A. exclusion.
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If a tax cut increases people's labor supply, then the tax cut
A) increases potential GDP. B) decreases aggregate demand. C) decreases potential GDP because the real wage rate falls. D) does not affect aggregate demand. E) Both answers B and C are correct.
In the real business cycle model, output and employment are
a. determined by real supply-side variables. b. determined by supply and demand factors. c. always at their natural rates. d. both a and c. e. None of the above
A business owner makes 1000 items a day. Each day she spends 8 hours producing those items. If hired, elsewhere she could have earned $250 an hour. The item sells for $15 each. Production occurs seven days a week. If the explicit costs total $150,000 per month, what is her economic profit?
a. $300,000 b. $60,000 c. $450,000 d. $240,000
A reduction in the marginal tax rate can cause potential output to increase by:
A) encouraging early entry into the labor market by reducing the incentive to earn advanced degrees. B) increasing after-tax wage rates and thus allowing workers to work fewer hours. C) increasing the incentive to invest more in education and earn advanced degrees. D) increasing government revenues and thus government expenditure.