Related to the Economics in Practice on page 155: You own a truck and use it to deliver merchandise to retailers and hire a driver to make such deliveries. The speed at which you instruct the driver to drive depends on
A. neither the driver's wage nor the price of gasoline.
B. the driver's wage and the price of gasoline.
C. the driver's wage only.
D. the price of gasoline only.
Answer: B
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Refer to Figure 4.1. A shift from S2 to S1 will result from which of the following?
A) an increase in expected future profits B) an increase in net exports C) a decrease in corporate taxes D) an increase in tax credits for savings
From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S. and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
D B and C are correct. A Due to their differences in quality and performance, dealer bicycles are not close substitutes. (A) C Dealers are small sellers and have little control over bicycle prices. B The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. (B) E A and B are correct.
In the long-run framework, deficits reduce:
A. government consumption. B. investment. C. taxes. D. subsidies.
In the 1990s, President Clinton worked for
A. the introduction of student loans. B. tax credits and deductions for education. C. the GI Bill. D. the creation of the Pell Grant.