Which of the following is most likely a topic of discussion in economics?
a. Families must decide whether to spend their money on a new car or a fancy vacation.
b. Nations must choose whether to put more of the budget into police and fire protection or into the school system.
c. Towns must choose whether to put more of the budget into police and fire protection or into national defense.
d. Nations must decide whether to devote more funds to national defense or to police and fire protection.
a. Families must decide whether to spend their money on a new car or a fancy vacation.
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The supply of milk in Nexus City is perfectly elastic. If a tax is imposed on each gallon of milk sold, ________
A) the burden of the tax will fall entirely on the sellers B) the burden of the tax will fall entirely on the buyers C) the tax incidence on the sellers is higher than that on the buyers D) the deadweight loss due to taxation is zero
In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is
A) half a gallon. B) 1 gallon. C) 3 gallons. D) 4 gallons.
Figure 33-6
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If the economy in 34-6 (b) is experiencing an inflationary gap (point g), the economy’s self-correcting process will move unemployment to ____ and inflation to ____.
A. 4 percent; 6 percent B. 5.5 percent; 5 percent C. 5.5 percent; 7 percent D. 5.5 percent; 2 percent
Most economists reject the theory of rational expectations because
A. expectations adjust very quickly. B. workers receive wage increases in advance of inflation. C. the short-run aggregate supply curve is vertical. D. labor contracts tend to embody past inflation rates.