In the price system
A. prices are set by the interaction of supply and demand.
B. consumers alone set the price.
C. producers alone set the price.
D. prices are set by government action.
Answer: A
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Tax revenue is greater the more price elastic the demand curve
Indicate whether the statement is true or false
Refer to the information provided in Figure 19.1 below to answer the question(s) that follow. 
Figure 19.1 Refer to Figure 19.1. Initially after the payroll tax is imposed, the firms? cost per unit of labor is ________ per hour and the workers? take home pay is ________ per hour.
A. $12; $7 B. $9; $9 C. $10; $10 D. $10; $9
Economists believe that most individuals act as if they are motivated by self-interest and: a. respond selfishly
b. respond in predictable ways to changing circumstances. c. it leads to inconsistent and unpredictable behavior. d. all of the above.
Which of the following events create an outward shift of the production possibilities curve?
a. The United States moves resources from the production of goods for domestic production to the production of goods for export. b. Tax reductions reduce the cost and increase the volume of investment in factories, machinery, and research and development. c. There is an exodus of young people to another country where there is more political freedom. d. The unemployment rate falls from 33 percent to 12 percent.