The infant industry argument has a normative economic basis because
A. clearly, all industries need to be protected.
B. political corruption is the only deciding factor.
C. protected industries are selected on a factual basis.
D. the government must decide which industries should be protected.
Answer: D
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There is a direct relationship between the opportunity cost of bad behavior in a public venue and the use of bad behavior in that venue
Indicate whether the statement is true or false
For a Giffen good,
a. the income effect is greater than the substitution effect. b. the income effect is smaller than the substitution effect. c. the income effect equals to the substitution effect. d. none of the above is true.
Refer to the production possibilities curve. At the onset of the Second World War, the United States had large amounts of idle human and property resources. Its economic adjustment from peacetime to wartime can best be described by the movement from
point:
A. c to point b.
B. b to point c.
C. a to point b.
D. c to point d.
A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits. It is currently operating in the elastic range of its MRP curve. If the wage rate increases, its total spending on wages at the new equilibrium will:
A. Be larger B. Be smaller C. Be unchanged D. Change in an undetermined direction