Game theory analysis of macro policy suggests that as voters become more short-sighted
A) policy makers will be tempted to raise taxes.
B) policy makers will be forced to balance the budget.
C) policy makers will adopt policies today to achieve balanced budgets in the future.
D) all of the above
E) none of the above
E
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As interest rates fall, the
A) promised payments of bonds fall. B) face values of bonds fall. C) price of bonds rises. D) price of bonds falls.
If movies on DVD for home rental and movies seen at a theater are substitutes, and the price of movies seen at a theater increases, the demand for movies on DVD will:
A) increase. B) stay the same. C) decrease. D) cannot be determined.
The above figure shows supply and demand curves for milk. Suppose that the government passes a $2 per gallon subsidy. The deadweight loss resulting from this policy will be
A) j. B) f + g. C) b + c + f + g. D) c + g.
If markets are perfectly competitive, then the production of goods
A) will use the least costly combination of resources. B) will occur at an average total cost value that is above the minimum. C) will require government intervention. D) will always lead to business failures.