Deciding not to buy any junk food at the grocery store while shopping for the week is:
A. an example of how individuals may compensate for the time inconsistency of their actions.
B. an example of a tool people can use in order to enact the actions they say they want to make, but have a hard time making.
C. an example of removing temptation in an effort to match present-oriented decisions more closely to future-oriented ones.
D. All of these are true.
Answer: D
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Even if the Fed could completely control the money supply, monetary policy would have critics because
A) the Fed is asked to achieve many goals, some of which are incompatible with others. B) the Fed's goals do not include high employment, making labor unions a critic of the Fed. C) the Fed's primary goal is exchange rate stability, causing it to ignore domestic economic conditions. D) it is required to keep Treasury security prices high.
The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear
a. an equal share of the tax in comparison to firms. b. a greater share of the tax in comparison to firms. c. a smaller share of the tax in comparison to firms. d. All of the above are possible.
Part of the reason for the success of Facebook is:
A. the avoidance of a positive externality. B. a strong negative network externality. C. a strong positive network externality. D. the avoidance of a negative externality.
A firm will begin to experience diminishing returns at the point where
A. marginal cost decreases. B. marginal product increases. C. marginal cost increases. D. Both B and C are correct.