In an idealized laissez-faire world, the distribution of products is
a. the most efficient.
b. the most fair.
c. purely random.
d. unpredictable.
a
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To implement an efficient Pigouvian tax in a competitive market that has negative production externalities, the government would need to know the shape of the entire social marginal cost curve.
Answer the following statement true (T) or false (F)
If the yield curve has a mild upward slope, the liquidity premium theory (assuming a mild preference for shorter-term bonds) indicates that the market is predicting
A) a rise in short-term interest rates in the near future and a decline further out in the future. B) constant short-term interest rates in the near future and further out in the future. C) a decline in short-term interest rates in the near future and a rise further out in the future. D) a decline in short-term interest rates in the near future and an even steeper decline further out in the future.
Since 2004, the Fed has focused on a core price index that excludes food and energy prices to measure inflation because
A) food and energy are necessities, so consumers have no choice but to purchase these. B) food and energy prices tend to remain stable in the short run, so are not relevant to the calculation of inflation. C) including food and energy prices tends to overstate the true inflation rate by 0.5% to 1%. D) food and energy prices tend to fluctuate up and down for reasons that may not be related to the general causes of inflation.
Refer to Figure 14.2. Other things equal, an increase in worker productivity would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point C to point A. D) point C to point B.