Expansionary fiscal policy fails to achieve the government's national economic goals. Some economists claim it is due to indirect crowding out. What evidence would be consistent with this claim?
A. The price level decreased.
B. The interest rate increased.
C. Saving decreased.
D. An increase in consumer spending occurred.
Answer: B
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If the Consumer Price Index was 90 in one year and 100 in the following year, then the rate of inflation is about
A. 11%. B. 10%. C. 12%. D. 9%.
Consider three pricing strategies that the firm can pursue:
a. optimal two-part tariff pricing b. perfect price discrimination c. single-price monopoly pricing. Of these three strategies, which is least likely to benefit society as a whole? A) single-price monopoly pricing because there are mutually beneficial trades (between consumers and seller) that are not exploited B) Both perfect price discrimination and two-part tariff pricing do not benefit society because the entire consumer surplus is extracted by the producer. C) perfect price discrimination because those willing to pay higher prices are forced to subsidize those who are not D) a two-part tariff pricing because consumers have to pay a fixed fee in addition to a per-unit price
The amount of labor a firm employs depends on
A) the market wage. B) the market price for the good produced. C) Both A and B. D) None of the above.
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. Assume Jack will play the games that have a higher expected payoff than the cost of playing the game. Comparing the expected value of the payoff of each game to the price of $5 to play, we can conclude that Jack should:
A. play the second but not the first. B. play neither. C. play the first but not the second. D. play both.