It is possible to purchase diplomas from diploma mills. The situation in which the degrees are more important than the knowledge they are supposed to represent is called:

A deadweight loss occurs as a result of a per-unit tax because: a. the government spends tax dollars less efficiently than do private citizens

b. there is a decline in output for units for which the marginal benefit exceeds the marginal cost. c. taxes cause an overproduction of output relative to the socially efficient level or production. d. a surplus is created.

The economy's self-correcting mechanism is such that demand shocks are offset in the long run by shifts of aggregate supply and supply shocks are offset by shifts of aggregate demand

a. True b. False