Discuss the dangers of inflation; that is, why may it hurt an economy?
The three biggest dangers of inflation are that it can frustrate the intent of long-term contracts, distort the information delivered by prices, and cause decision makers to devote real resources toward protecting themselves from inflation.
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Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Mia's opportunity cost of producing one hair pin is
A) 1/3 of a bandana. B) 2.5 bandanas. C) 3 bandanas. D) 10 bandanas.
Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect
A) the quantity of good Y demanded to increase and the demand for good X to increase also. B) an increase in the demand for good X and a decrease in the quantity of good Y demanded. C) an increase in the quantity demanded of good Y and a decrease in the demand for good X. D) an increase in the demand for both good X and good Y.
Examples of employment discrimination would include
A. the legendary Negro league pitcher Satchel Paige who was not allowed to pitch in the major leagues until he was in his late 40s. B. the large majority of women in the 1950s and 1960s who were typists or secretaries. C. the attitude that typing, filing and other clerical positions were "women's work". D. all of the examples are true.
If property rights are weak or uncertain, resource extraction will tend to:
A. occur faster than the rate that would maximize the long-run stream of profits. B. occur slower than the rate that would maximize the long-run stream of profits. C. occur at the rate that would maximize the long-run stream of profits. D. stop.