Which of the following ideas of Adam Smith has religious overtones?
A. Comparative advantage
B. Aggregate demand
C. Perfect competition
D. Rational expectations
E. Invisible hand
Answer: E
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Explain the CPI bias and how it can distort private contracts and increase government outlays
What will be an ideal response?
Tax incidence is the actual division of the
A) tax revenues between the federal government and state governments. B) population into different tax brackets. C) burden of the tax between buyers and sellers in a market. D) tax revenues between government agencies.
A firm could continue to operate for years without ever earning a profit as long as it is producing an output where
A) ATC > AVC. B) AFC < AVC. C) MR > AVC. D) MR < ATC.
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. Jack is considering whether to play the first game. If Jack only cares about the expected value of the outcome and does not care about risk, he should:
A. not play the game, since it costs $5 and the expected payoff is $5.75. B. play the game since it costs $5.75 and the expected payoff is $5. C. not play the game since it costs $5.75 and the expected payoff is $5. D. play the game since it costs $5, and the expected payoff is $5.75.