What is a government's budget constraint in the long run as opposed to a given time period?
What will be an ideal response?
In a given time period, the government budget constraint is the limitation on public expenditures, which is the total amount of tax revenues plus borrowed funds. However, a government cannot borrow forever, so that its constraint in the long run is simply tax revenues.
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Refer to Figure 7.1. At what level of output does average total cost equal marginal cost?
A) Q2 B) Q3 C) Q4 D) Q5 E) none of the above
According to most economists, the development of markets is:
A. both a necessary and a sufficient condition for development. B. a sufficient condition for development but not a necessary condition. C. a necessary condition for development but not a sufficient condition. D. neither a necessary nor a sufficient condition for development.