Suppose a tornado ravages a city, causing 5 million dollars in expenditures on new construction and healthcare for the victims. Those new expenditures
A) would be added to the gross domestic product account.
B) would be subtracted from the gross domestic product account.
C) would be added to the gross domestic product account and subtracted from the national income account.
D) would impact GDP in none of the above ways.
A
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Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9 . To raise the most tax revenue, the government should:
a. place a unit tax on good A. b. place a unit tax on good B. c. raise the price elasticity of demand for good A. d. subsidize the production of good B. e. cut its spending for various social programs.
A country that has a lower opportunity cost of producing a good:
a. has a comparative advantage. b. can produce the good using fewer resources than another country. c. requires fewer labor hours to produce the good. d. all of these.