Economists are sharply divided over how to best fight the Great Recession. The majority of economists favor the "Stimulus Solution," which involves
A.
Relying on the invisible hand of the market to set things right
B.
Government actions to increase the total demand for output in the economy
C.
Making prices become more flexible so that equilibrium can be attained once more
D.
Stimulus from abroad through international trade and treaties
B.
Government actions to increase the total demand for output in the economy
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An economy has two workers, Jen and Rich. Everyday they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________.
A. TVs; TVs B. radios; both goods C. radios; TVs D. TVs; radios
Common property
A) is owned by everyone. B) is owned by no one. C) Neither A nor B are correct. D) Both A and B are correct.
Kevin is re-finishing an antique grandfather clock that he purchased at a flea market for $300. He expects to be able to sell the clock for $450
At the last minute, Kevin discovers that he needs to repair the gears at a cost of $175 to make the clock worth $450 to potential buyers. It turns out that he could also sell the clock now, without completing the additional repairs, for $250. What should Kevin do? A) He should sell the clock now for $250. B) He should keep the clock but not make the repairs since the original $300 is a sunk cost. C) He should complete the additional repairs and sell the clock for $450. D) He should keep the clock after making the repairs since it is not rational to spend a total of $475 on an item that can only be sold for $450. E) Kevin is indifferent between selling the clock as is or selling it after completing the repairs.
Refer to the table above. This is an example of a ________ tax system
A) progressive B) regressive C) proportional D) cardinal