One major effect of the Great Depression was
a. it reaffirmed everyone's faith that capitalism was a self-correcting system.
b. it encouraged voters to limit the role of government.
c. the creation of the rational expectations school of economic theory.
d. a decreased faith in the ability of economies to automatically correct major problems.
d
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Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?
A) a fall in income if used cars are an inferior good B) an increase in the wage rate paid to used car salespeople C) neither of the above because the question suggests a violation of the "law of demand" D) neither of the above because the question suggests a violation of the "law of supply"
To correct for a negative externality, a government might impose a uniform tax related only to the physical quantity of pollution if
A) the administrative costs are high. B) the cost of ascertaining the actual economic costs are relatively small. C) the economic damages are zero. D) the economic damages associated with the pollution are different across different locations.
In order to ensure allocative efficiency on the part of a natural monopoly, regulators would set price equal to marginal cost
a. True b. False
The wage premium for the average college graduate (vs. the average high school graduate) has gone down significantly in recent years
a. True b. False