Which of the following is a difference between microeconomics and macroeconomics?
a. Microeconomics focuses on the actions of particular actors within the economy, while macroeconomics looks at the economy as a whole.
b. Microeconomics focuses on the division of labor, while macroeconomics focuses on the division of capital.
c. Microeconomics focuses on the development of small and medium enterprises, while macroeconomics focuses on the development of large business houses.
d. Microeconomics focuses on the development of the nation, while macroeconomics focuses on the economic wellbeing of each household in an economy.
a
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A $0.50 tax on lemons currently generates $200 in revenues per day. If the tax were increased to $2, the revenues generated would drop to $70. This tells you that in this range of tax rates the:
A. quantity effect outweighs the price effect. B. quantity effect outweighs the income effect. C. price effect outweighs the quantity effect. D. price effect outweighs the income effect.
The socially optimal rate of growth is:
a) Zero b) Negative c) Where the marginal social benefit = the marginal social cost d) Total social costs are minimized
Exhibit 2-12 Production possibilities curve
In Exhibit 2-12, suppose an economy with the given production possibilities curve is currently located at point A in the figure. Which of the following statements is false?
A. This economy could produce more of both capital and consumption goods. B. This economy is experiencing full employment. C. This economy could produce more capital goods while holding fixed the number of consumption goods produced. D. This economy could produce more consumption goods while holding fixed the number of capital goods produced.
The central idea behind comparative advantage is that a nation should:
A. Compare its market economy with other nations B. Specialize in the product that it can produce with the lowest opportunity cost C. Use money as a medium of exchange to facilitate specialization and trade D. Pursue investment in capital goods as a means of stimulating economic growth