What do a rubbernecking traffic jam and the paradox of thrift have in common?
A. In both cases, individual behavior has large negative consequences for the whole of society.
B. In both cases, seemingly bad behavior ends up harming everyone.
C. In both cases, seemingly careless behavior leads to good times for all.
D. In both cases, government intervention can only make matters worse
Ans: A. In both cases, individual behavior has large negative consequences for the whole of society.
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Suppose your accountant told you that the economic profit you made last year was $50,000 . You would be pleased because the $50,000 represents your total revenue minus
a. implicit costs b. monetary costs c. explicit costs d. both implicit costs and explicit costs e. the difference between explicit and implicit costs
The first president who commit the government to a target unemployment rate is
A. FDR. B. John F Kennedy. C. Bill Clinton. D. Lyndon Johnson.
Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hanger and could rent it out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an airplane for $6,000, pays $1,300 for fuel and maintenance, and hires one worker for $30,000. Sam's total revenue from pilot training classes this year equaled $90,400. Sam's accounting profit this year equals:
A. $45,600. B. $51,400. C. $39,000. D. $44,800.
Which of the following correctly describes a way in which deficit spending can impose a burden on future generations?I.Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP) will require taxing future generations at a higher rate to repay the resulting higher public debt.II.Government deficits that lead to higher employment and real Gross Domestic Product (GDP) in the future will generate increased income taxes for future governments, which will respond by spending the higher tax revenues, creating higher future government budget deficits.III.Other things being equal, deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment, thereby leaving future generations with a smaller
stock of capital than otherwise would have existed. A. I only B. II only C. I and III only D. II and III only