In the economic way of thinking, what do entrepreneur's and bureaucrats have in common?
A) They each advance projects solely in the public interest.
B) They each advance projects only if the expected marginal benefits exceed the expected marginal costs.
C) They each advance projects only if the expected marginal benefits are less than the expected marginal costs.
D) They each advance projects only if they impose no negative externalities.
B
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Refer to Figure 26-7. Suppose the Fed lowers its target for the federal funds rate. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) C to D. B) A to B. C) C to B. D) E to A. E) B to A.
The two primary explanations for the excess volatility of consumption are
A) consumers' limited life spans and credit market imperfections. B) credit market imperfections and changes in market prices. C) changes in market prices and distorting taxes. D) distorting taxes and consumers' limited life spans.
Last year, the nominal interest rate was less than the anticipated rate of inflation
A) This means that not enough loans were made by banks. B) This means that the real interest rate was negative. C) This means that the real interest rate was very high. D) This scenario is not possible.
Opportunity cost is measured by the
a. dollars paid for the goods b. quantity of other goods given up c. value of the resources used d. technology used e. units of opportunity gained by having the good