To which of the following is a maximum price control most likely to be applied?
a. wages
b. agricultural products
c. alcohol
d. rents
d. rents
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Which branch of study helps in economic decision making when an individual's behavior determines the payoffs to others?
A) Microeconomics B) Macroeconomics C) Game theory D) Public economics
Consider a general Cobb-Douglas production function q = ALaKb
where A, a and b are positive constants. Using this production function, derive the short-run cost function for a fixed capital stock, K0, wage rate w, and capital rental rate r.
Higher the economic freedom in a country, _____
a. lower is the standard of living of the people b. higher is the life expectancy of the people c. greater is the bureaucratic freedom and red-tapism d. lower is the level of access to education due to lack of government schools e. lower is the literacy rate
Ricardian equivalence predicts:
A. that if governments cut taxes but not spending, people will not change their behavior. B. if people perceive current tax cuts to mean higher tax payments in the future, the cuts will have little expansionary effect. C. the consumers need to feel as though they will not have to pay in the future for current spending to make current tax cuts effective expansionary policy. D. All of these are true.