The circular flow of income describes the
A) flow of income from domestic firms to the nonproduction sector and back again.
B) amount of money in the economy.
C) sum of all injections into the economy.
D) sum of all withdrawals from the economy.
A
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Suppose planting flowering shrubs creates a positive externality equal to $7 per shrub. Further suppose that the local government offers a $7 per-shrub subsidy to planters. The number of shrubs that are planted is then
a. less than the socially optimal quantity. b. greater than the socially optimal quantity. c. equal to the socially optimal quantity. d. There is not enough information to answer the question.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point A to Point B, ________ additional OLED TVs could be produced when the production of LCD TVs is reduced by 30.
A. exactly 20 B. more than 20 C. fewer than 20 D. exactly 90