In a price system, changes in prices
A) make it difficult for the system to function well.
B) imply that people have made mistakes in the past.
C) signal to everyone in the system what goods are relatively more or less scarce.
D) signal to policy makers what goods should and should not be taxed more.
C
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After long hair for men became popular, barbers found that their incomes fell. In an attempt to boost their incomes, many barbers raised the price of a haircut and yet their total revenue fell even more. What can explain this result?
A) The demand for haircuts by barbers is elastic because of many substitutes. B) The demand for haircuts by barbers became inelastic after the increase in price. C) Haircuts are inferior products. D) The demand for haircuts by barbers is inelastic because most people need haircuts. E) None of the above can explain the phenomenon.
A computer software program is most strongly an example of
A) real property. B) fiat property. C) intellectual property. D) vicarious property.
Omitted variable bias
A) will always be present as long as the regression R2 < 1. B) is always there but is negligible in almost all economic examples. C) exists if the omitted variable is correlated with the included regressor but is not a determinant of the dependent variable. D) exists if the omitted variable is correlated with the included regressor and is a determinant of the dependent variable.
Crowding out is reduction in:
A. corporate borrowing that is caused by an increase in private borrowing. B. private borrowing that is caused by an increase in government borrowing. C. private borrowing that is caused by an increase in corporate borrowing. D. government borrowing that is caused by an increase in private borrowing.