The term time inconsistency is used to describe:
A. a situation in which we regret choices we make simply because of when we made the choice.
B. a situation in which we change our minds about what we want simply because of the timing of the decision.
C. people's inability to correctly predict how their current choices will affect them in the future.
D. people's inability to make choices today that determine their actions in the future.
B. a situation in which we change our minds about what we want simply because of the timing of the decision.
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An efficient way to get a tire manufacturer to produce the socially optimal output level is
A) to impose a tax to make the tire manufacturer bear the external cost it creates. B) for government to set a quota on the quantity of tires that it can produce. C) to grant a subsidy to enable the manufacturer to internalize the external costs of production. D) to assign property rights to the tire manufacturer.
Suppose a plaintiff hires a lawyer to represent her in a court case. The lawyer will be paid by the hour. Under this contract
A) efficiency is not achieved. B) the client bears all of the risk. C) the lawyer has an incentive to lie about his hours worked. D) All of the above.
Marginal revenue of nth unit of output is:
a. total revenue of (n+1)th unit minus total revenue of nth unit. b. total revenue of nth unit minus total revenue of (n-1)th unit. c. total revenue of (n+1)th unit minus total revenue of (n-1)th unit. d. the sum of total revenue of (n+1)th unit and nth unit. e. the sum of total revenue of (n+1)th unit and (n-1)th unit.
Demand pull inflation occurs when the:
A. price of a key input increases suddenly. B. price level changes in response to changes in the business cycle. C. price of necessity goods increases suddenly. D. business cycle becomes sporadic and unpredictable.