The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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According to the graph shown, the profits at point A are:
A. higher than those at point B.
B. lower than those at point B.
C. the same as those at point B.
D. higher than those at point C.
Which of the following might be an example of an economic argument against advertising?
a. It causes the demand for the good to be more elastic b. It allows the producer to earn an economic profit in the long run c. People may be deluded into thinking that a good with a brand name is better than an otherwise identical generic brand d. The claims made in the ads are almost always false
Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. What is Larry's economic surplus from attending State College instead of his next best alternative?
A. $10,000 B. $5,000 C. $40,000 D. $20,000
According to most economists,
A. command-and-control regulations work better than incentive-based regulations. B. incentive-based regulations work better than command-and-control regulations. C. command-and-control regulations have about the same effectiveness as incentive-based regulations.