A poll conducted by a national firm finds that most Americans say they care more about safety when buying a car than about fuel efficiency. As a result, a car maker produces a car with many safety features, but it doesn't sell well. This behavior
A) contradicts economic theory because the people didn't do what they said they would do.
B) contradicts economic theory because it is irrational not to purchase safer cars.
C) does not contradict economic theory because economists focus on what people do rather than on what they say.
D) does not contradict economic theory because economic theory only relates to prices and not to features such as safety.
C
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Jones and Smith live in the same apartment building. Jones loves to play his opera recordings so loudly that Smith can hear them. Smith hates opera. Jones receives $100 of benefits from his music and Smith suffers $60 of damages. a
From an efficiency perspective, should Jones be allowed to play his opera CDs? b. Suppose the apartment building does not have any rules about noise. Jones and Smith can bargain at zero cost. Will they reach an agreement where Jones gives up his beloved operas? c. Now suppose the apartment building passes a rule that says residents are not allowed to play music their neighbors can hear if any of the neighbors object. As before, Jones and Smith can bargain at zero cost. Will Jones be allowed to play his music?
Those economists who believe that monetary policy is more powerful than fiscal policy argue that the
a. LM curve is vertical. b. IS curve is horizontal. c. interest rate elasticity of investment is large. d. interest rate elasticity of investment is small.
The income security program category for federal government outlays includes spending for:
a. Social Security. b. Medicare. c. Welfare. d. Unemployment compensation. e. All of these.
Refer to the above table. What does the marginal revenue product equal when 27 workers are hired a week?
A. $8 B. $16.25 C. $216 D. $1040