If the use of fossil fuels is harming our nation, according to the specificity rule the optimal policy to use to mitigate this harm is to
A. tax the consumption of fossil fuels.
B. levy taxes on the extraction of coal and petroleum.
C. subsidize research and development on alternate fuel sources.
D. impose tariffs on the importation of fossil fuels.
Answer: A
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The model of expectations in which the current level of inflation depends on past levels is referred to as:
A) realized real expectations. B) adaptive expectations. C) rational expectations. D) composite expectations.
If the price of gasoline rose from $2.85 to $2.95 per gallon, your expenditure on gasoline would increase if your price elasticity of demand for gasoline equals
A) 1.25. B) 1.00. C) 0.75. D) Total revenue would increase at all of the above elasticities.
The largest sector in the consumer price index market basket is food and beverage purchases
a. True b. False Indicate whether the statement is true or false
You purchase a $30, nonrefundable ticket to a play at a local theater. Ten minutes into the show you realize that it is not a very good show and place only a $10 value on seeing the remainder of the show. Alternatively you could leave the theater and go home and watch TV or read a book. You place an $8 value on watching TV and a $12 value on reading a book
a. You should stay and watch the remainder of the show. b. You should go home and watch TV. c. You should go home and read a book. d. You should go home and either watch TV or read a book.