When deciding whether to engage in an activity or how much to do, people should follow:
A. the principle of microeconomics.
B. the principle of macroeconomics.
C. the marginal principle.
D. the law of supply and demand.
Answer: C
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The highest-valued alternative that must be given up to engage in an activity.
What will be an ideal response?
The first step toward reducing negative externalities or maintaining them within acceptable bounds, according to the argument of the textbook, is
A) constructing an exhaustive list of all negative externalities. B) creating a central planning authority for negative externalities. C) cultivating such civic virtues as courtesy and tolerance. D) halting population growth. E) prohibiting activities whose costs are greater than their benefits.
Explain how we "read" the three graphs in Figs. A1.1 and A1.2
What will be an ideal response?
If inflation is higher than expected, this helps borrowers (by reducing the real interest rate they pay) and hurts lenders (by reducing the real interest rate they receive)
Indicate whether the statement is true or false