One major assumption of the theory of rational expectations is that
A. all firms use rational expectations.
B. the economy does not have a self-correction mechanism.
C. the economy has a very effective self-correction mechanism.
D. all consumers use rational expectations.
C. the economy has a very effective self-correction mechanism.
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Use the figure below to answer the following question.
If actual production and consumption occur at Q2
A. there is deadweight loss of d. B. there is deadweight loss of f. C. consumer surplus and producer surplus is maximized. D. economic surplus is below the maximum.
If Mario's Pizza offers consumers who purchase one medium sized pizza a second pizza at half price, this is an example of ________.
A) third-degree price discrimination B) second-degree price discrimination C) first-degree price discrimination D) zero-degree price discrimination
The process of adding more capital per worker is called capital deepening
a. True b. False Indicate whether the statement is true or false
Which of the following is not a problem with a public good?
a. An incentive to free-ride b. A public good is often underconsumed c. An absence of private property rights d. An inability to limit consumption to those who purchase the good e. A public good is usually underproduced