Refer to Figure 4.1. A shift from S2 to S1 will result from which of the following?
A) an increase in expected future profits
B) an increase in net exports
C) a decrease in corporate taxes
D) an increase in tax credits for savings
B
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When the automobile replaced horse-drawn carriages as the principal means of transportation, firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers, thereby increasing i. seasonal unemployment. ii
structural unemployment. iii. cyclical unemployment. A) i only B) ii only C) i and iii D) i and ii E) ii and iii
If both a monopoly and a competitive market with the same marginal cost would produce a quantity that is greater than the social optimum in a market because of externalities, then
A) welfare is greater under monopoly. B) welfare is greater under competition. C) welfare is the same for both market structures. D) the social optimum must be zero.