The market demand schedule in perfect competition is horizontal
a. True
b. False
Indicate whether the statement is true or false
False
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An economy is in the midst of a recession. An example of a government policy aimed at moving the economy back to potential GDP is:
a) an increase in taxes. b) an increase in government spending on infrastructure improvements. c) an increase in the poverty tax. d) a decrease in unemployment benefits.
When production of a good generates external costs, the
a. demand curve for the good will overstate the true social benefits from consumption of the good. b. demand curve for the good will understate the true social benefits from consumption of the good. c. supply curve for the good will overstate the true social cost of producing the good. d. supply curve for the good will understate the true social cost of producing the good.