The quantity equation is always true because it:
A. has been empirically tested.
B. is a law of economics.
C. is the definition of velocity rewritten.
D. has been historically verified.
Answer: C
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The imposition of a unit excise tax on beer will
A) lower equilibrium price and quantity in the market. B) increase equilibrium quantity and price in the market. C) lower equilibrium quantity and raise equilibrium price in the market. D) raise equilibrium quantity and lower equilibrium price in the market.
A system of private property rights
A) encourages economic growth by creating incentives to invest in capital and to be innovative. B) discourages economic growth by discouraging the development of new ideas and ways of doing things. C) reduces the efficiency of government, which reduces the growth rate of the economy over time. D) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.
When an inverse relationship is graphed, the resulting line or curve is:
a. horizontal. b. vertical. c. upward-sloping. d. downward-sloping.
Public goods are overproduced in the marketplace
a. True b. False Indicate whether the statement is true or false