Coordination failures occur when
A. one party withholds valuable information in a transaction that leads to overproduction.
B. party A would like to change his behavior if party B would change hers, and vice versa, and yet the two changes do not take place because the decisions of A and B are made independently.
C. consumers save more of their income than the government would like.
D. the average price of a good persists, even though the good should be priced higher than the average price.
Answer: B
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The invocation of beggar-thy-neighbor arguments with respect to industrial policies
A) strengthens the argument for subsidies. B) makes sense if the international Keynesian multipliers exceed unity. C) applies only to rich countries most of whose trade partners are very poor countries. D) weakens the argument for subsidies. E) does not apply to rich countries who can influence relative world prices.
Which of the following statements is true?
A. There are more attainable points than unattainable points in every PPF diagram. B. If scarcity did not exist, neither would a PPF. C. All PPFs are downward-sloping straight lines D. The concept of opportunity costs cannot be illustrated within a PPF framework.
Using the above table, the Net Domestic Product (NDP) for the country is
A. 338. B. 84. C. 328. D. 662.
Isabel noted that whenever she wore her green contact lenses, the Chicago White Sox would win that evening. Based on this observation, she developed the "green-eyes-for-White-Sox" theory of winning. It is most likely true that Isabel
A. committed the fallacy of logic. B. showed good reasoning for the reason the White Sox would win. C. committed the ceteris paribus error. D. was confusing causality.