The field of political economy:
A. examines the economic consequences of free markets.
B. examines the economic consequences of public sector decision making.
C. examines the economic consequences of private sector decision making.
D. examines the labor market.
B. examines the economic consequences of public sector decision making.
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Which of the following statements about markets is correct? I. A market helps resources move to their highest-valued uses by means of prices changes. II. A market represents the exchanges of both buyers and sellers
A) I only B) II only C) Both I and II D) Neither I nor II
Expansionary fiscal policy is used to
A) combat inflation. B) combat recessions. C) encourage private saving. D) make businesses more efficient.
Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below.Process(smoke/day) A(10 tons/day) B(8 tons/day) C(6 tons/day) D(4 ton/day) E(2 tons/day) Cost to Acme ($/day) $750$800$1,000$1,400$2,000 Cost to FirmCo ($/day) $500$750$1,200$2,200 $4,000Suppose the firms are both currently using process A. If the government imposes a tax of $110 per ton of smoke emitted, a total of ________ tons of smoke will be emitted each day, and the total cost to society of this policy will be ________ per day.
A. 16; $250 B. 14; $500 C. 20; $0 D. 18; $50
Which is true of normal profits?
A. They are necessary to keep a firm in the industry in the long run. B. They are excluded from a firm's costs of production. C. They are greater than the opportunity cost to the firm. D. They are zero under pure competition in the long run.