Which of the following is NOT part of the first big economic question?
A) What goods and services are produced?
B) How are goods and services produced?
C) For whom are goods and services produced?
D) Why do incentives affect only marginal costs?
D
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Politicians have an incentive to favor short-run policies because _____
a. because voters suffer from myopia b. of special interests c. they may be voted out of office before long-run policies bear fruit d. of rational ignorance
A firm that engages in efficient production
A) cannot produce the same output with fewer inputs. B) could produce the same output with fewer inputs if it wanted to. C) is not interested in profit maximization. D) uses old technology to minimize costs.
The slope of the line from the origin to a given point on the curve equals
A) the increase in output. B) the change in input divided by the change in output. C) the average product of the input. D) the marginal product of the input.
In a simplified banking system subject to a 25 percent required reserve ratio, a $1,000 open-market purchase by the Fed would cause the money supply to:
a. increase by $1,000 b. decrease by $1,000. c. decrease by $4,000 d. increase by $4,000.