To an economist, it is preferable to
A) assume that all criminals are rational.
B) assume that all criminals are irrational.
C) build a theory based on a rational criminal and then check the evidence.
D) a or b
C
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In general, the only thing that can cause a sustained increase in the rate of inflation is: a. a high rate of growth in the supply of money. b. a significant increase in unemployment
c. a decrease in real GDP. d. an increase in federal income taxes.
At the output level defining allocative efficiency
A. the areas of consumer and producer surplus necessarily are equal. B. consumer surplus exceeds producer surplus by the greatest amount. C. marginal benefit exceeds marginal cost by the greatest amount. D. the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output.
Refer to the above graphs. A price increase from $20 to $40 causes quantity demanded to decrease from 100 units to 50 units. Which graph best illustrates the price elasticity of demand for this good?
A. Graph A B. Graph B C. Graph C D. Graph D
Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is weak and GM cars aren't selling well. GM isn't sure when the plant will reopen. What type of unemployment best describes the workers' situation?
A. Frictional unemployment B. Full unemployment C. Cyclical unemployment D. Structural unemployment