One key is difference between government activities and private transactions is that:
A. Government can enforce involuntary transactions, whereas private transactions are mostly voluntary
B. Government can only produce services, whereas private producers can produce both goods and services
C. Government does not run any production operations, whereas private firms have the main purpose of running production operations
D. Government does not earn revenues from its activities, whereas private firms aim to earn revenues and profits
A. Government can enforce involuntary transactions, whereas private transactions are mostly voluntary
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Imposing a restrictive quota on imported plasma TVs will likely
a. increase the price of the plasma TVs and decrease the quantity consumed. b. increase both the price of the plasma TVs and the quantity consumed. c. leave the price of the plasma TVs unchanged but decrease the quantity consumed. d. leave the price and the quantity consumed of plasma TVs unchanged, because domestic producers will expand production to make up for the reduction in imports
An efficiency loss (or deadweight loss):
A. is measured as the combined loss of consumer surplus and producer surplus. B. results from producing a unit of output for which the maximum willingness to pay exceeds the minimum acceptable price. C. can result from underproduction, but not from overproduction. D. can result from overproduction, but not from underproduction.