Emotions like guilt and sympathy:
A. are irrelevant to economic decision-making.
B. can solve commitment problems, but generally reduce players' payoffs.
C. can solve commitment problems.
D. reduce the likelihood that a transaction will maximize total economic surplus.
Answer: C
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In theory, differences in output across economies and over time might be the result of differences in either capital input, labor input, or productivity
The evidence points clearly to productivity as a more likely and powerful source of growth differences. Which aspects of the Solow growth model help to explain why the inputs of capital and labor contribute little to growth of output, relative to productivity?
Which of the following is not a property of a typical indifference curve?
a. downward sloping b. bowed away from the origin c. does not intersect another indifference curve d. a higher one is preferred to a lower one
If the price-elasticity coefficient for a good is 1.75, the demand for that good is described as
What will be an ideal response?
In order to move aggregate demand to the level consistent with full employment by means of fiscal policy, government officials who set the budget must know
A) the current level of aggregate demand. B) the level of aggregate demand that would be consistent with full employment. C) the size of the budget changes required to induce the appropriate-sized changes in aggregate demand. D) all of the above.