Related to the Economics in Practice on page 155: Which of the following is the best analysis of the question of how fast delivery truck drivers should drive in order to reduce costs?
A. They should drive as quickly as possible in order to make more deliveries per day.
B. They should balance the concerns of speed and fuel efficiency and drive at a speed that minimizes total expenses.
C. They should drive at the most fuel-efficient rate in order to reduce fuel consumption costs.
D. They should drive as close to the legal speed limit as possible.
Answer: B
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Fill in the blank(s) with the appropriate word(s).
A situation in where the costs of an action are NOT fully borne by the two parties engaged in exchange is
A) an externality. B) an internality. C) internal costs. D) a transactions cost.
By refusing to be time inconsistent, a central bank is ________ its reputation and ________ "policy credibility."
A) harming, losing B) harming, gaining C) investing in, losing D) investing in, gaining
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a. the growth rate of productivity will decrease and firms' profits will increase b. the growth rate of productivity will increase and firms' profits will decrease c. most individuals will likely lose their jobs due to lack of skills d. the growth rate of productivity will increase and living standards will increase e. firms' profits will increase and living standards will decrease