Economic growth occurs when
A. nominal GDP increases.
B. GDP per capita in the short run increases.
C. a nation's capacity to produce increases.
D. there is a movement along the production possibility curve resulting in increased personal consumption expenditures.
Ans: C. a nation's capacity to produce increases.
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If a tax on a good is doubled, the deadweight loss from the tax
a. stays the same b. doubles c. increases by a factor of four d. could rise or fall
Firm A is a monopoly because of network effects, whereas Firm B is a natural monopoly. Which of the following statements is likely to be true in this context?
A) The average total costs of both firms decrease as they increase their output. B) The value of the product that both firms produce increases with an increase in the number of buyers. C) Firm A enjoys a monopoly status because its average total cost decreases with increase in output, whereas Firm B enjoys a monopoly status because the value of its product increases as more consumers buy it. D) Firm B enjoys a monopoly status because its average total cost decreases with increase in output, whereas Firm A enjoys a monopoly status because the value of its product increases as more consumers buy it.