Which of the following is possible when the market fails?
A. It is impossible for government intervention to improve the mix of goods and services.
B. The mix of goods and services is the optimal mix.
C. The mix of goods and services is at the correct point on the production possibilities curve.
D. The mix of goods and services is on the production possibilities curve.
Answer: D
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Refer to the scenario above. Real GDP of the country has grown by ________
A) 0.2% B) 10% C) 5% D) 20%
Refer to the scenario above. If the income tax rate for the fourth household is higher than the income tax rate for the second household, it can be inferred that the government follows a ________ income tax system
A) progressive B) regressive C) proportional D) value-added
Which of the following relationships correctly identifies the profit maximization condition of a firm in a perfectly competitive market?
A) Marginal cost < Price = Marginal revenue B) Marginal cost > Price = Marginal revenue C) Marginal cost = Price = Marginal revenue D) Marginal cost = Price < Marginal revenue
If, for the last bushel of apples produced and sold by an apple farm marginal revenue exceeds marginal cost, then in producing that bushel the farm
A) added an equal amount to both total revenue and total cost. B) added more to total cost than it added to total revenue. C) maximized its profits or minimized its losses. D) added more to total revenue than it added to total cost.