A potential negative effect of advertising for society is that it can:
A. be self-canceling and contribute to economic inefficiency.
B. lower barriers to entry and undermine profits in the industry.
C. reduce mutual interdependence and increase competition.
D. be the major cause of price wars among firms in the industry.
Answer: A
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An AIDS epidemic hurts an economy by
a. requiring additional expenditures on health care b. reducing the working-age population c. increasing the child mortality rate d. reducing the growth of output e. all of the above
Persons in the civilian labor force fall into one of two categories: ____________ or ___________.
a. job leaver; job loser b. entrant; reentrant c. employed; unemployed d. discouraged workers; encouraged workers
Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year). Based on this scenario, which of the following statements is correct?
a. GDP would definitely increase, despite the fact that GDP includes leisure. b. GDP would definitely increase because GDP excludes leisure. c. GDP could either increase or decrease because GDP includes leisure. d. GDP could either increase or decrease because GDP excludes leisure.
Suppose that as the price of apples rises, people switch from eating apples to eating oranges. This is known as:
A. the income effect of a price change. B. a decrease in the demand for apples. C. the substitution effect of a price change. D. the normal effect of a price change.