Which of the following statements is TRUE?
A. Rational ignorance exists only in politics.
B. Rational ignorance still leads to an efficient outcome.
C. Rational ignorance is bad because it leads to uninformed voters making decisions.
D. It never makes sense for individuals to be rationally ignorant.
Answer: C. Rational ignorance is bad because it leads to uninformed voters making decisions.
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Based on the figure above, short-run equilibrium occurs at the price level of
A) 120 and real GDP of $5 trillion. B) 130 and real GDP of $10 trillion. C) 140 and real GDP of $15 trillion. D) 130 and real GDP of $15 trillion.
Which of the following would fall under the "rule of reason doctrine?"
a. General Motors colludes with Ford to fix the price of their cars b. Coke and Pepsi collude to limit the quantity of soft drinks on the market c. Intel dominates the market for computer processors with a 95% market share d. Reynolds American, Inc. and Lorillard, Inc. agree to limit the introduction of new cigarette brands e. two local restaurants agree to increase their prices by 10%
What are the arguments in favor of trade restrictions, and what are the counterarguments? According to most economists, do any of these arguments really justify trade restrictions? Explain
If the number of South Korean Won it takes to buy a U.S. dollar rises and the prices of U.S. goods rise more than the prices of South Korean goods. then the US real exchange rate
a. appreciates and so U.S. net exports fall. b. appreciates and so U.S. net exports rise. c. depreciates and so U.S. net exports fall. d. depreciates and so U.S. net exports rise.