Congressman Dearmark justified spending $3 million on a new entertainment complex in his district because it will create 450 new jobs for his residents. As a student of economics, you know that
a. this is a case of the "broken window fallacy.".
b. this is a great use of taxpayer dollars.
c. this policy diverts money from spending somewhere else in the economy.
d. Both a and c are correct.
d
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How did the Fed peg interest rates during World War 2?
A) by setting a low federal funds rate B) by agreeing to purchase any bonds that were not purchased by private investors C) through extensive use of discount loans D) through nationalization of the banking system
The hidden-cost fallacy occurs when
a. A firm considers irrelevant costs b. A firm ignores relevant costs c. A firm considers overhead or depreciation costs to make short-run decisions d. Both a and c
Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we expect to happen in the market?
a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. None of the above is correct.
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good.
According to the graph shown, if the government restricts trade, area G represents:
A. quota rents. B. transferred surplus. C. government tax revenues. D. deadweight loss.