When studying the effects of public policy changes, economists
a. always refrain from making assumptions.
b. sometimes make different assumptions about the short run and the long run.
c. consider only the direct effects of those policy changes and not the indirect effects.
d. consider only the short-run effects of those policy changes and not the long-run effects.
b
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A stated goal of a minimum wage is to
A) increase government tax revenue. B) stabilize production costs. C) boost the incomes of low-wage earners. D) decrease business profits. E) increase business profits by making the labor market more efficient.
Suppose a firm manager has a base salary of $85,000 and earns 0.5 percent of all sales. Determine the manager's income if revenues are $2,000,000 and profits are $500,000.
A. $50,000 B. $95,000 C. $170,000 D. $87,500
Fred Powell, the CEO of TruLite, is in a quandary. He wants to bring a new lamp to the market that is based on fuel technology. He just does not understand the technology involved, but he has several engineers who have spent a lot of time investigating the issue. Powell needs to
A. hire outside experts to question his engineers about fuel cells. B. just make a decision so he can beat the competition in the market. C. retire and replace himself with an engineer. D. decentralize decision making to people with specific knowledge.
Sadie just bought a new karaoke machine to replace her old one. Her old one works perfectly fine and would sell on Craigslist for $50. The fact that Sadie would not pay $50 for it, yet continues to let it sit in her closet unused is explained by:
A. ignored sunk costs. B. the implicit cost of ownership. C. irrationally considering sunk costs. D. the cost of admitting she likes karaoke.