Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?
A) a smaller trade sector
B) a higher rate of investment
C) higher tax rates
D) greater use of taxation to transfer income from the rich to the poor
B) a higher rate of investment
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The components of aggregate expenditure are consumption expenditure,
A) investment, government expenditure on goods and services, and net exports. B) investment, government expenditure on goods and services, and net taxes. C) interest, government expenditure on goods and services, and net exports. D) investment, government expenditure on goods and services, and net income. E) interest, gross spending, and net spending.
An increase in the price of an input to a perfectly competitive industry will: a. increase price and reduce the number of firms
b. increase price and increase the number of firms. c. increase price and have an ambiguous effect on the number of firms. d. reduce the number of firms and have an ambiguous effect on price.
Refer to Price Ceiling. The price ceiling creates a deadweight loss equal to
The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.
a. area A + H.
b. area B + C + D + E.
c. area B + D.
d. area C + E.
In Problem 5, in the long run, what is the market price and the quantity of paper produced? What is the number of firms in the market?
What will be an ideal response?