Normative economics deals with
a. social norms and customs that influence economic behavior
b. norms of behavior that can be taken as facts
c. statements of fact
d. statements about the value of a proposed policy
e. government rules and regulations that drag down the economy
D
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Milton Friedman would eliminate the destabilizing effect of the Federal Reserve's monetary policy by
A) eliminating the Federal Reserve. B) removing the Federal Reserve's political independence. C) requiring that the Federal Reserve choose a monetary aggregate and increase it at a fixed percentage rate each year. D) eliminating the Federal Reserve's right to carry out open-market operations.
In drawing a straight-line production possibilities curve for an economy that produces oil and corn, we assume that resources (for example, the number of labor hours)
a. are fixed b. increase at a constant rate c. increase at an increasing rate d. increase at a decreasing rate e. are not uniform, such as a variety of skills and quality of work
Which condition is the Nash equilibrium for this scenario?
a. Each firm charges $9.
b. Each firm charges $10.
c. Firm A charges $10 while Firm B charges $9.
d. Firm B charges $10 while Firm A charges $9.
Recall the Application about the economics professor who caught three students cheating on their final exam to answer the following question(s).Recall the Application. After being caught cheating, the economics professor called each student into his office individually. One student remarked "This feels like you put me in a prisoners' dilemma game." If this cheating episode resulted in the same way as the prisoners' dilemma, then:
A. none of the students would confess to cheating. B. only one student would confess to cheating. C. two of the students would confess to cheating. D. all three students would confess to cheating.