All of the following are possible explanations for the increase in U.S. government budget deficits as a percentage of GDP since the early 2001 EXCEPT
A) increases in tax revenues.
B) increases in payments for entitlements.
C) increases in government spending.
D) decreases in tax rates.
A
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According to the Economics in Action story “A Crushing Reversal” in the slides of chapter 7, what happened to the market for wine in the US between the mid-1990s and 2002? In the mid-1990s, demand for wine in the US increased, which first resulted in higher wine prices and profits until…
A) some producers exited the market so that lower supply pushed prices up even further. B) some producers exited the market so that lower supply pushed prices down again. C) new producers entered the market so that higher supply pushed prices up even further. D) new producers entered the market so that higher supply pushed prices down again.
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 20,000 units of iced tea are sold
A) the marginal benefit of each of the 20,000 units of iced tea equals $3. B) producer surplus equals consumer surplus. C) marginal benefit is equal to marginal cost. D) the deadweight loss is equal to economic surplus.