The economic way of thinking indicates that government action will
a. never improve on the allocation of resources through markets.
b. always improve on the results of markets if the political process is democratic.
c. reflect the actions of political decision-makers seeking to advance the public interest, rather than their own personal interests.
d. can either improve the well-being of the general public, or harm it, depending on the circumstances.
D
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In the Keynesian model, changes in aggregate supply
a. are the primary determinant of inflation. b. could only destabilize the economy. c. are ignored. d. None of the above
The features of the M-Form of firm organization are
a. divisions have difficulty responding to market changes b. it is difficult to maintain customer relationships c. coordination across divisions is simple and does not take much management time d. employee evaluation is hampered by managers often having different skill sets than those the manage
Situation 4-1 During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoline) was in force in the United States. At the beginning of 1974, some oil-producing countries imposed an oil embargo (a legal prohibition on commerce) on the West. In the spring of 1974, price controls were abolished. Refer to Situation 4-1. Before the oil embargo, the price
ceiling on gasoline had no noticeable effect on the market. What is the most likely explanation for this? A) The equilibrium price of gasoline was probably below the price ceiling. B) The demand curve for gasoline in the 1970s was vertical. C) The supply curve for gasoline in the 1970s was vertical. D) The equilibrium price of gasoline was probably above the price ceiling.
Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:
A. Gertie should buy the jeans because the price is less than her reservation price. B. Gertie should buy the jeans because the price is more than her reservation price. C. Gertie should not buy the jeans because the price is not equal to her reservation price. D. Gertie should not buy the jeans because they will be of lower quality than she expected.