To analyze policy options, economists are forced to deal with
A. ordinary citizens.
B. elected officials.
C. rotating statistical values.
D. events that have not occurred.
Answer: D
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The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house
If there is a 20 percent chance that the home could be entirely destroyed, would this person buy a $20,000 insurance policy to replace the house if destroyed? A) No, it is too expensive. B) No, he is not risk averse. C) Yes, the homeowner would pay even more. D) Yes, this is the most the homeowner would pay.
Supply-side tax cuts are more likely to have the intended beneficial effect on
A. budget deficits. B. consumer spending. C. investment spending. D. net exports.
Graphically, the optimum choice of a consumer is determined at: a. the point of intersection of the lowest indifference curve and the budget constraint. b. the point of intersection of the budget line and the vertical axis
c. the point where the highest indifference curve is tangent to the budget constraint. d. the point of intersection of the budget line and the horizontal axis.
Identify the economist who first addressed the environmental problem in terms of externalities.
A. Joseph Schumpeter B. Maynard Keynes C. A.C. Pigou D. J.B. Say