Which of the following is the main weakness of the classical model?
a. It assumes that the labor supply curve is vertical.
b. It assumes that the labor supply curve is horizontal.
c. It assumes that the labor market clears.
d. It assumes that the labor demand curve is horizontal.
e. It assumes that the labor demand curve is vertical.
C
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A Pigovian tax internalizes an external cost because
a. the cost then enters the decision-making process of the producer. b. it would be collected by the Internal Revenue Service. c. the revenue is used to compensate injured parties. d. no transactions costs are created.
The federal funds market is the market where
a. the federal government borrows money from banks to finance the national debt b. the federal government lends money to commercial banks c. banks borrow from and lend to each other for short periods of time d. banks borrow money from the Fed for short periods of time e. banks buy bonds from the Treasury for long periods of time, typically 10-year bonds
Explain the relationship between the budget constraint and indifference curve at a consumer's optimum
Which formula is used to calculate total revenue?
a. TR = P x Q b. TR = P + Q c. TR = P – Q d. TR = P/Q