By 2007, the Combined Cost of All Levels of Government

question 61

Multiple Choice

By 2007, the combined cost of all levels of government in the United States had risen from approximately 11% of GDP in 1930 to:

• A)50% of GDP.
• B)33% of GDP.
• C)25% of GDP.
• D)15% of GDP.
• E)10% of GDP.

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Definitions:

Downward-Sloping Demand

A market condition reflected in a demand curve where the quantity demanded of a good decreases as the price of that good increases, and vice versa.

Total Surplus

The sum of consumer and producer surplus; a measure of the overall benefit to society from a market transaction.

Perfectly Price-Discriminated

A pricing strategy situation where a seller charges the maximum possible price for each unit consumed that consumers are willing to pay, thereby capturing all potential consumer surplus.

Perfect Price Discrimination

The act of charging each consumer the maximum price that they are willing to pay for a product, thereby capturing the entire consumer surplus.