Rationing through the price system
A) leads to an inefficient use of available resources.
B) leads to high prices.
C) works only with government interference.
D) leads to an efficient use of available resources.
Answer: D
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Taxes are one method of funding the poverty alleviation programs by the government. Which of the following is an important impact of taxes?
a. Taxes increase workers' incentives to work for longer hours. b. Taxes raise the disposable income of the workers. c. Imposition of taxes makes the government popular among the people. d. Taxes reduce the opportunity cost of leisure. e. Taxes reduce the demand for labor.
Refer to the above figure. Which panel is consistent with the Laffer curve?
A. Panel A B. Panel B C. Panel C D. Panel D
In a binding situation, a decrease in the Z factors
A. does not shift the AD curve. B. shifts the AD curve to the right. C. shifts the AD curve to the left. D. causes the AD curve to become horizontal.
If a price ceiling is set above the equilibrium price,
A. there will be a shortage. B. there will be a surplus. C. demand will be less than supply. D. quantity demanded will equal quantity supplied.