Using economic theory to analyze policy issues
A. is a way to avoid inconvenient facts.
B. allows researchers to disprove a hypothesis.
C. relies on simplifications to conduct studies.
D. always includes the inclusion of political ideals.
Answer: C
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Economists are often perceived as disagreeing with each other. Is this the way things really are?
A. No, economists agree on much more than is commonly supposed. B. No, the problem is that some economists are smarter than others. C. No, economists “stage” disagreements for public amusement. D. Yes, economists rarely agree on much of anything. E. Yes, economists are unable to analyze problems dispassionately.
A monetary system is preferable over the barter system because of the problems associated with
A) the law of diminishing marginal utility. B) the law of increasing relative costs. C) the double coincidence of wants. D) cash leakages.
The above figure shows supply and demand curves for milk. In an effort to help farmers, the government passes a law that establishes a $3 per gallon price support. As a result, consumer surplus falls by
A) a. B) b + f. C) f + g. D) b + f - c.
The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, consumer surplus equals
A) A. B) A + B + C. C) C. D) zero.