When Rick uses a common resource and diminishes other people's enjoyment of it, he creates
a. a free rider problem.
b. an externality.
c. a nonrenewable resource.
d. general knowledge.
b
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Suppose that a firm spends $200,000 to build a factory in 2012 that is expected to have a life of 10 years. As a result, GDP in 2012 will increase by:
a. $20,000 b. $200,000 c. You need to know the selling price of the factory to answer this question. d. It depends upon the tax law regarding depreciation.
Economists think of products as being in the same market if they
A. are traded in the same geographic location. B. cannot be substituted for other goods and services. C. are highly interchangeable. D. produced by companies that complete with each other.
Some people attribute the rapid growth of the East Asian economies in the 1980s and 1990s to the:
A. governments planning for growth by investing in certain industries. B. governments picking industries to support with investments and favorable tax and trade policies. C. success of their "industrial policies." D. All of these are true.
"Monetary instability has been the major cause of economic instability in this country. Expansion in the money supply has been the source of every major inflation. Every major recession has been either caused or perpetuated by monetary contraction." Who among the following would most likely adhere to this view?
A. Monetarists. B. Keynesians. C. Demand-side economists. D. Quantity theorists.