Which of the following is the best definition of economics?
a. Economics is the study of how humans make decisions in the face of scarcity.
b. Economics is the study of the division and specialization of labor.
c. Economics is the study of the production of goods and services.
d. Economics is the study of markets.
a. Economics is the study of how humans make decisions in the face of scarcity.
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In contrast to the need for legal enforcement under a system of direct controls, a taxes approach
A. is subject to greater uncertainty of payment of fees. B. makes taxes automatic and certain. C. speeds the prosecution and conviction process. D. does not actually reduce pollution, merely the cost of monitoring it.
Demand for real money balances depends on ________
A) the price level B) the real interest rate C) the opportunity cost of holding money D) all of the above E) none of the above
A $0.50 tax on lemons currently generates $200 in revenues per day. If the tax were increased to $2, the revenues generated would drop to $70. This tells you that in this range of tax rates the:
A. quantity effect outweighs the price effect. B. quantity effect outweighs the income effect. C. price effect outweighs the quantity effect. D. price effect outweighs the income effect.
If a firm is hiring a certain type of labor under purely competitive conditions:
A. its labor demand curve will be perfectly elastic at the market-determined wage rate. B. the labor supply curve will lie above the marginal labor cost curve. C. the labor supply and marginal labor (resource) cost curves will coincide and be upsloping. D. the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic.