Time lags can cause economic policy to affect the economy after the underlying problems have changed.
Answer the following statement true (T) or false (F)
True
The effect of the untimely policy can be destabilizing.
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If firms were charged the full social opportunity cost of the resources they used, there would be
A. A need for government intervention. B. Market failure. C. No external costs. D. Government failure.
U.S. government laws limit the importation of sugar into the United States. As a result, the U.S. price of sugar is about three times as high as the world price of sugar. U.S. sugar producers strongly support these rules. How would most economists explain this policy?
A. It is an example of a form of sin tax intended to help people with a self-control problem involving sweets. B. The policy is a way of solving an income distribution problem; it redistributes from the rich to the poor. C. It illustrates the public choice view that small gains concentrated to a few producers can be more important politically than large losses spread over many consumers. D. It is an example of the government using cost/benefit analysis to correct a market failure.
In which of the following market structures do you find no barriers to entry?
A. perfect competition B. monopolistic competition C. monopoly D. Both perfect competition and monopolistic competition are correct
In the above figure, the production of 75 ukuleles and 75 guitars is
A. full employment production. B. impossible production. C. inefficient production. D. efficient production.