Fiscal policy cannot help an economy produce at an output level above potential GDP without causing __________.

Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is ________

A) 1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible B) 2 rides per day C) 4 rides per day D) 6 rides per day because that is the maximum number of rides

Does this production function, q = 10L0.5K0.3, experience increasing, decreasing or constant returns to scale?

A) Decreasing because a 100% increase in inputs increases outputs by 80%. B) Increasing because an 80% increase in inputs increases outputs by 100%. C) Decreasing because 0.5 + 0.3 < 1. D) A and C.