Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the nation's production possibilities frontier?
A) no impact at all
B) The level of unemployment would decrease so the production possibilities frontier would shift outward.
C) The nation would move to a new position on its production possibilities frontier but the frontier itself would not shift.
D) The production possibilities frontier would shift inward.
E) The number of young workers would increase so the production possibilities frontier would shift outward.
D
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An economy is experiencing a high rate of inflation. The government wants to reduce aggregate demand by $36 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective?
A. $9 billion B. $6 billion C. $16 billion D. $12 billion
The free rider problem occurs because:
a. it is easy to exclude others from consuming a good. b. consumption is rivalrous, so the consumption of a product by one individual diminishes the amount available for others. c. exclusion is costly or impossible, so a consumer or producer can use a good without having to pay for it. d. external costs are imposed on others not directly involved in the transaction. e. individuals are not required to pay for those goods which do not yield any utility to them.
In the case of Intimate Bookshop v. Barnes & Noble, Intimate alleged that Barnes & Noble
a. was bundling products in order to reduce competition. b. used technological advances to sell at lower prices. c. was buying books at discriminatory prices. d. had merged with other competitors in an effort to gain monopoly power.
When free markets ration goods with prices, it is both efficient and impersonal
a. True b. False Indicate whether the statement is true or false