If Noah thinks the last dollar spent on belts yields more satisfaction than the last dollar spent on socks, and Smith is a utility-maximizing consumer, he should
a. decrease his spending on socks.
b. decrease his spending on socks and increase his spending on belts.
c. increase his spending on belts.
d. increase his spending on socks and decrease his spending on belts.
B
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How would you describe the consensus of economic thinking on anti-inflationary policies?
What will be an ideal response?
Regulation might NOT increase total surplus because
A) the costs of the regulation might outweigh the benefits. B) it may not be possible to gather the information necessary to set prices correctly. C) regulators might get captured by the industry. D) All of the above.
An example of an automatic stabilizer is
a. unemployment benefits. b. a lowering of interest rates by the Fed. c. a decrease in money demand. d. a decrease in tax rates in response to a recession.
As a manufacturer becomes a mass producer, generally productivity ____ and wage rates _____.
A. falls; fall B. rises; rise C. rises; fall D. falls; rise