For a common resource, the marginal private cost curve slopes ________ and the marginal social cost curve slopes ________
A) upward; upward
B) upward; downward
C) downward; upward
D) downward; downward
A
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Suppose a new Dunkin' Donuts shop has opened in town. Its main competitor, Doughnut Delite, will likely
a. begin to produce more doughnuts. b. experience higher marginal costs. c. reduce its prices and production. d. make no changes in its pricing and production decisions.
Why would a policymaker risk inflation if workers can just renegotiate their wages?
A) There is a change that workers will not fully anticipated the impact of the policy. B) The policymakers want to look like they are actively involved in the economy. C) Inflation is not a high price to pay in the economy. D) The policymakers do not believe that the workers can renegotiate.
In the New Keynesian model,
A) money is neutral. B) money is fixed. C) monetary policy has a real impact. D) prices are countercyclical.
According to economists, when two people make exactly the opposite decision
A) one of them is acting irrationally. B) each person evaluates the situation according to his/her individual self-interest. C) one of them is acting out of spite. D) one of them should compromise.