Which of the following statements is an example of confusing association and causation?
A. Senator Jones believes that more tax revenue should be distributed to the poor.
B. A map includes roads, but not every restaurant, telephone pole, andÂ
C. Interest rates rise when it rains, all other factors constant.
D. When the price of Coca-Cola increases, consumers buy more Pepsi, all other factors constant.
Answer: C
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Which of the following illustrates a macroeconomic question?
A. What is the least costly way to produce automobiles and trucks in the United States? B. Should the salaries of financial executives be regulated by the government? C. Will the introduction of a new computer chip change the demand for computers? D. Are increasing wage demands by workers contributing to price inflation?
The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output
A) is achieved. B) can be achieved by giving paper producers a subsidy. C) can be achieved by imposing a Pigovian tax on paper producers. D) cannot be achieved.
If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?
A. $7 B. $3 C. $4 D. $11
The most powerful tool unions have at their disposal when bargaining with management is
A) the Taft-Hartley Act. B) the ability to strike. C) the secondary boycott. D) the power of pure competition.