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Deadweight loss measures the difference between two efficient situations. ( )

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If the size of a tax increases, tax revenue will increase. ( )

The circular-flow diagram illustrates that, in markets for the factors of production, ( )

A. households are sellers, and firms are buyers.
B. households are buyers, and firms are sellers.
C. households and firms are both buyers.
D. households and firms are both sellers.

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Compared to the social optimum, a monopoly firm chooses ( )

A. a quantity that is too low and a price that is too high.
B. a quantity that is too high and a price that is too low.
C. a quantity and a price that are both too high.
D. a quantity and a price that are both too low.

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In an hour, David can wash 2 cars or mow 1 lawn, and Ron can wash 3 cars or mow 1 lawn. Who has the comparative advantage in car washing, and who has the comparative advantage in lawn mowing? ( )

A. David in washing, Ron in mowing.
B. Ron in washing, David in mowing.
C. David in washing, neither in mowing.
D. Ron in washing, neither in mowing.

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