If producing a good generates pollution (a negative externality), from a social perspective
a. The price will be too low and the quantity produced will be too low
b. The price will be too low and the quantity produced will be too high
c. The price will be too high and the quantity produced will be too low
d. The price will be too high and the quantity produced will be too high
e. The price will be too low but the quantity produced will be correct
Answer: b. The price will be too low and the quantity produced will be too high
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Describe the major features of the business cycle. Be sure to discuss what variables are affected by the cycle, a description of the key features that are apparent in the data, how variables are related to one another, how regular the cycle is, and
how predictable the cycle is.
Based on current budget projections, in the U.S. over the next 20 years the
a. structural deficit rises will fall sharply as tax revenues rise. b. cyclical deficit will fall as the economy expands. c. structural deficit will rise sharply as a higher proportion of the population retires. d. structural deficit will fall sharply as more people enter the workforce. e. none of the above.
When graphed, the total cost of production will
a. intercept the vertical axis at the level of fixed cost b. first slope down, then slope up c. slope down forever d. first slope up, then slope down e. be a horizontal line
If the positive effect of a greater quantity demanded more than offsets the negative effect of a lower price, then total revenue rises
Indicate whether the statement is true or false