Under laissez faire, society's decisions about how much of every product to produce depend on
a. consumer preferences only.
b. production costs only.
c. consumer preferences and production costs.
d. neither consumer preferences nor production costs.
c
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In the long run, what effect does a government's deficit spending have on equilibrium real Gross Domestic Product (GDP)?
A) Equilibrium real Gross Domestic Product (GDP) will increase beyond the full-employment level and there will also be an inflationary effect. B) Higher government deficits will not raise equilibrium Gross Domestic Product (GDP) above the full-employment level. C) Deficit spending will decrease the nation's equilibrium real Gross Domestic Product (GDP). D) The government's deficit spending will increase equilibrium real Gross Domestic Product (GDP).
An efficiency loss (or deadweight loss) declines in size when a unit of output is produced for which:
A. marginal cost exceeds marginal benefit. B. maximum willingness to pay exceeds minimum acceptable price. C. consumer surplus exceeds producer surplus. D. producer surplus exceeds consumer surplus.