A prisoner's dilemma illustrates situations in which:
A. there is a conflict between the narrow self-interest of individuals and the broader interests of a group.
B. resources with the lowest opportunity cost should be used first.
C. efficiency is an important social goal.
D. everyone does best when each person specializes in the activities in which he or she has a comparative advantage.
Answer: A
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Buy Airline Tickets over the Weekend A recent study by economists Steven Puller and Lisa Taylor found that airline tickets purchased over the weekend were priced 5% lower on average. Why would airlines charge lower prices to customers making bookings on the weekend?
According to the Keynesian view, if an economy was operating at long-run equilibrium, an increase in government expenditures (holding taxes constant) would
a. be inflationary. b. lead to a recession. c. lower the real rate of interest. d. reduce the size of the national debt.
The economy was in long-run equilibrium when aggregate demand increased. At this point in time, the expected inflation has started to adjust to the new higher actual inflation rate. According to the (Friedman) natural rate theory, this means the unemployment rate in the economy must currently be
A) decreasing. B) increasing. C) higher than it was in long-run equilibrium. D) equal to what it was in long-run equilibrium. E) There is not enough information to answer the question.
Refer to the information provided in Figure 20.4 below to answer the question(s) that follow.
Figure 20.4Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. After the tariff is imposed, domestic consumption of domestically produced wallets will be ________ wallets and domestic consumption of imported wallets will be ________ wallets.
A. 100; 250 B. 200; 50 C. 150; 100 D. 150; 250