Ceteris paribus, the demand curve for a good will shift to the right in response to:
A. A decrease in income.
B. An increase in the costs of production.
C. An increase in tastes or preferences for the good.
D. A higher price for the good.
Answer: C. An increase in tastes or preferences for the good.
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Fred is considering opening a ski shop in Colorado. Assume Fred will incur the following costs: building rent = $100,000/year, inventory = $250,000/year, energy = $50,000/year, and labor (one clerk) = $10,000/year
In addition, Fred's current income as a computer programmer is $40,000 per year. Assuming Fred would earn $460,000 in revenues, he could expect to earn: A) an accounting profit of $10,000 per year. B) an accounting profit of $60,000 per year. C) an economic profit of $10,000 per year. D) an economic profit of $50,000 per year.
All of the following have been proposed as explaining the limited effectiveness of monetary policy during and after the Financial Crisis of 2007-2009 EXCEPT:
A) recessions accompanied by financial crises tend to be severe B) a high level of uncertainty due in part to government policy C) the reluctance of the Fed to implement nonconventional policies D) structural changes as important sectors of the economy were deeply affected by the financial crisis
To optimally deter crime, law enforcement authorities should:
A) set higher fines for crimes that have a lower probability of being caught. B) set the fine equal to the expected benefit, even if it is difficult to catch the offenders. C) ignore the probabilities of catching offenders and attempt to prevent crime at all costs. D) set very high fines regardless of the probability that an offender is caught.
One of the most controversial public policy issues in recent decades is the size and growth of the U.S. budget deficit and public debt. Discuss where we are, compared to other countries, and how we got here