Suppose that because of climatic conditions, the smog levels in Los Angeles suddenly soar to dangerous levels. The most successful policy in this case would be
A. direct controls to limit driving.
B. taxes on drivers at rush hours.
C. voluntary cooperation to reduce driving.
D. removal of autos with excessive emissions.
Answer: C
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The Affordable Care Act is intended to reduce the price of health care. A decrease in the price of health care may
A) increase the number of doctors office visits if office visits are considered an inferior good and the substitution effect dominates the income effect. B) decrease the number of doctors office visits if office visits are considered an inferior good and the substitution effect dominates the income effect. C) increase the number of doctors office visits if office visits are a normal good. D) Both A and C.
A decrease in the interest rate will: a. increase the amount of money borrowed by firms
b. decrease the amount of money borrowed by firms. c. have an ambiguous effect on the amount of money borrowed by firms. d. have no effect on the amount of money borrowed by firms.
In the short run, the law of diminishing returns
A. Can be observed in every production process. B. Does not occur in command economies. C. Occurs for only a few economies. D. Can be overcome by using more variable inputs.
The upward slope of the supply curve reflects the:
A. law of supply. B. principle of specialization in production. C. fact that price and quantity supplied are inversely related. D. law of diminishing marginal utility.