Which of the following is a good example of government's attempt to correct for macroeconomic externalities?
A. Preventing excessive amounts of pollution
B. Providing for smoke-free public spaces
C. Maintaining full employment
D. Providing public goods
Answer: C
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If the United States exports planes to Brazil and imports ethanol from Brazil, the price received by U.S. producers of planes ________ and the price received by Brazilian producers of ethanol ________
A) does not change; does not change B) rises; rises C) rises; falls D) falls; falls E) falls; rises
A person who is, all else equal, more willing to throw away a $20 shirt than a $200 shirt, even if both are worn out, is:
A. dynamically inconsistent. B. dynamically consistent. C. demonstrating sunk cost fallacy. D. demonstrating pre-commitment.
For a firm in a perfectly competitive market, if it produces where marginal cost exceeds marginal revenue it:
A. should cut back production to increase profits. B. should increase production to increase profits. C. is producing a profit-maximizing quantity. D. is impossible to tell if it is actually maximizing profits.
What is the best definition of “inflationary bias” in this context?
Read the following passage and then answer the question that follows. Since 1995, the Bureau of Labor Statistics (BLS) has been eliminating or reducing biases in the Consumer Price Index (CPI). Many economists believe that the BLS improvements have cut inflationary bias in half, and it is now estimated to be less than 1 percentage point per year. a. the tendency to believe that inflation is beneficial to the economy b. the tendency to promote policies that cause a positive inflation rate c. the tendency to overstate the rate of inflation d. the tendency of the members of an economy to push prices up