When the Phillips curve was first formulated (late 1960s), many economists thought that it showed a
a. "menu" of budget deficits from different budget policies.
b. "menu" of possible choices available to policy makers.
c. guide to the appropriate mix of fiscal and monetary policy.
d. guide of political reactions to economic policy.
b
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A cartel is a group of firms which agree to
A) behave competitively. B) raise the price of their product. C) lower the price of their product. D) increase the amount they produce.
What are the effects of an increase in the minimum wage? Who would be most affected?
What will be an ideal response?
You've read about a soldier who, in the heat of battle, willingly sacrifices his or her life to save the lives of fellow soldiers. How can you best explain such a sacrifice in terms of utility analysis? a. The soldier makes an interpersonal comparison of utility and decides that the life of the soldier saved is less valuable than his own
b. The soldier makes an interpersonal comparison of utility and decides that the probability of getting killed is less than the probability of not getting killed, but waswrong. c. The soldier makes an interpersonal comparison of utility and decides that the probability of getting killed is less than the probability of not getting killed, and wasright, but the probability of getting killed was still greater than zero. d. In the heat of battle, the soldier may place an incredibly high value on saving a comrade's life, even higher than his own. e. In the heat of battle, a soldier doesn't think rationally.
An example of a positive externality is
a. pollution because it affects people not directly involved with producing it b. a homeowner's maintenance of a beautiful lawn because this creates a benefit for neighbors c. creating a monopoly d. driving a car that emits pollution e. cigarette smoking because this imposes an indirect cost on people around the smoker