"As soon as a mayor announced his/her 'get tough on crime' policy on New Year's day, criminals got scared and the crime rate went down." Suppose that the lower crime rate was actually caused by freezing cold temperatures in January?it was just too cold for anybody to be out robbing other people. Which fundamental hazard of the economic way of thinking did the mayor make?
a. believing that what's good for one person is good for the whole group (the fallacy of composition)
b. failing to take into account the benefits of crime (the payoff fallacy)
c. believing that association is the same as causation
d. failing to understand the difference between positive and normative economics.
c
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Why has the federal government generally run budget deficits over the past several decades?
A) Political pressures make expenditures hard to control. B) The federal government's control of the money supply enables it to borrow indefinitely without becoming unable to find creditors. C) The public has accepted the notion that budget deficits can be good for the economy. D) A combination of the three factors mentioned above.
Define absolute advantage
Consider an unregulated monopoly in Figure 8.13. At the firm's profit-maximizing output level, its total revenue is:
A. $1,000,000. B. $200,000. C. $800,000. D. $600,000.
Refer to the information provided in Figure 13.11 below to answer the question(s) that follow.
Figure 13.11Refer to Figure 13.11. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. What is the societal loss from having a monopoly instead of a perfectly competitive industry supplying widgets?
A. $0 B. $4,000 C. $16,000 D. Indeterminate from the given information.