A boom is:
A. a period in which the economy is growing at a rate significantly below normal.
B. the high point of economic activity prior to a downturn.
C. a particularly strong and protracted expansion.
D. a particularly severe and protracted recession.
Answer: C
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Refer to the scenario above. Which of the following would have happened if the government had decided to provide an export subsidy on these cash crops?
A) The volume of exports would have decreased. B) The government's revenue would have increased. C) Domestic producers would have been better off. D) Domestic consumers would have been worse off.
In the above figure, suppose the quantity produced is 40. Then
A) the marginal social cost of the 40th unit is $1. B) the willingness to pay for the 40th unit is $2, the equilibrium price. C) production is not efficient because MSB > MSC. D) production is not efficient because MSC>MSB.
Because the United States usually sends more humanitarian and military aid to foreigners than it receives, ______.
a. the net balance is usually positive b. exports of goods are usually in deficit c. service imports are usually positive d. the net transfers are usually in deficit
If service stations raise the price of gasoline and experience a decrease in demand for automobile tires, then gasoline and tires are:
a. Substitute goods b. Inferior goods c. Complementary goods d. Economic goods