Some time ago an executive of a Broadcasting company argued before a congressional committee that they should make a law rating TV shows for violence content. He said that children are damaged and violence must be curbed. He indicated that his own network shows too much violence and that he would welcome a law himself so that Turner Broadcasting would show less violence. Explain why someone who shows violence on his TV channels is arguing for government regulation of himself.
What will be an ideal response?
The executive knows that the public likes violence and so his ratings will fall if he alone reduces it. If everyone reduces the violence, no one broadcaster will be hurt relative to the others. In other words, he is arguing the case based on positional externalities that are apparent in this case.
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Which statement best describes economic fluctuations?
a. Expansions and contractions typically have about the same lengths. b. Expansions typically last 7 years, while recessions typically last 3 years. c. Expansions tend to be shorter than contractions. d. The percent change in output is larger during recessions than during expansions. e. Expansions and contractions vary in duration and magnitude, with expansions tending to last longer than contractions.
What is the change in consumer surplus after trade as shown in Exhibit 2?
a. – b – c
b. – b – c – e – f
c. + e + f
d. + b + c
Federal budget deficits
A. help stabilize the economy during recessions and depressions. B. depress interest rates. C. rarely occurred prior to the Reagan Administration. D. stimulate investment spending by businesses. E. are always undesirable.
In real terms, the cost of government spending is measured by
A. Subtracting private sector output from the public sector output sacrificed when the government employs scarce resources. B. The public sector output sacrificed when the government employs scarce resources. C. The private sector output sacrificed when the government employs scarce resources. D. Combining the private sector output with the public sector output sacrificed when the government employs scarce resources.