According to new classical economists, policies should be introduced suddenly to surprise the economy in order to
A. Prevent political lobbying that results in goal conflicts.
B. Minimize design problems that impede the implementation of policy.
C. Avoid the lags associated with policy announcements.
D. Prevent anticipatory behavior that defeats the purpose of the policy.
Answer: D
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Refer to Table 7-6. Prior to trade, what was the opportunity cost to produce 1 sword in Estonia?
A) 1/3 of a belt B) 3/5 of a belt C) 1.67 belts D) 3 belts
The vertical distance between a firm's average total cost curve and its average variable cost curve is its
a. marginal cost b. sunk cost c. total variable cost d. total fixed cost e. average fixed cost
Because a monopolist has no incentive to control costs under a policy of average-cost pricing, we can expect:
A. price to increase over time as costs rise. B. price to fall over time as costs rise. C. profits to increase over time as costs rise. D. profits to decrease over time as costs rise.
Which of the following statements is true?
A. If a buyer ends up being worse off from an exchange rather than better off as expected, this is a negative externality. B. As long as the benefits to society from an exchange outweigh the costs to the producer of the good or service, no negative externality has occurred. C. Secondhand cigarette smoke is an example of a negative externality. D. As long as the benefits to society from an exchange outweigh the costs to society, no negative externality has occurred.