Which of the following statements is true?
A. When the forces of supply and demand determine for whom goods are produced in a society, an equitable distribution of income will naturally result.
B. An external benefit will occur when a third party enjoys some of the benefits derived from production of some good or service.
C. One of the roles of the United States government is to provide a job to any able-bodied person who wants a job.
D. The price mechanism will work well if there are at least two companies that are competing against each other.
B. An external benefit will occur when a third party enjoys some of the benefits derived from production of some good or service.
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Refer to Figure 3.1. Which assumption concerning preferences do Alvin's indifference curves violate?
A) Diminishing marginal rates of substitution B) Transitivity of preferences C) More is preferred to less D) Completeness
The components of a well-run incentive compensation scheme include all of the following EXCEPT
a. evaluating the identified performance measures b. avoiding rewards for outcomes that are not included in the performance measures c. demonstrating that evaluators can be influenced with small favors d. identifying the relevant measures on which to evaluate employees
An increase in the price level caused by a rightward shift of the aggregate demand curve is called:
a. cost-push inflation. b. supply shock inflation. c. demand shock inflation. d. demand-pull inflation.
Which of the following is the best indication that the government is pursuing restrictive fiscal policy?
A. The cyclical deficit increases. B. The total deficit increases. C. The structural deficit increases. D. The structural deficit decreases.