In Europe, government regulations discourage consumer credit. "It's to protect the consumer from himself," says Jacques Zeegers, secretary general to the Belgian Banking Association. As far as Mr. Zeegers is concerned, the government should worry that there is a failure caused by:
A. rationality problems of individuals.
B. violations of inalienable rights.
C. economic efficiency.
D. distributional issues.
Answer: A
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A manager invests $400,00 . in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . Ceteris peribus, if the firm continues its production in the same economic environment, the firms economic profits should
a. increase b. decrease c. stay the same d. increase as long as the investment does not generate implicit costs that are greater than $0.15 per unit
Economists may disagree about the validity of alternative positive theories about how the world works
a. True b. False Indicate whether the statement is true or false
Automatic stabilizers are government programs or policies that will counteract the business cycle without any new government action.
Answer the following statement true (T) or false (F)
(Consider This) Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that:
A. there is no reason for them to trade services. B. Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at accounting services. C. Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at painting. D. Madison has the comparative advantage in both services.