An “optimally imperfect” decision is one that
A. is vaguely right instead of precisely wrong.
B. recognizes that the decision could always be better if given more time.
C. recognizes that the cost of additional information probably exceeds the potential gain from making a better decision.
D. recognizes that any decision is imperfect because humans have limited intellectual capacities.
Answer: C
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Suppose the price of chocolate chip cookies is $4.00 per pound and the price of a slice of cake is $2.00 per slice. The relative price of cake in terms of cookies is
A) 1/2 pound of cookies per cake. B) 2 pounds of cookies per cake. C) 1/2 slice of cake per cookie. D) 2 slices of cake per cookie.
In the short run, real GDP can increase beyond a level consistent with the long-run growth path if
A) existing capital and labor are used more intensely. B) the price level decreases accordingly. C) we measure in nominal terms instead of real terms. D) there is an increase in marginal tax rates.
Suppose planting flowering shrubs creates a positive externality equal to $7 per shrub. Further suppose that the local government offers a $7 per-shrub subsidy to planters. The number of shrubs that are planted is then
a. less than the socially optimal quantity. b. greater than the socially optimal quantity. c. equal to the socially optimal quantity. d. There is not enough information to answer the question.
Who is not included in the labor force by the Bureau of Labor Statistics?
a. Anita, who is on temporary layoff b. Lauren, who has retired and is not looking for work c. Raymond, who does not have a job but has applied for several in the last week d. None of the above is correct.