Market activity differs from government activity because
a. markets generally force prices to below-cost levels
b. governments never charge for the services they provide
c. markets do not use voluntary exchange mechanisms
d. markets provide a direct link between benefits and costs
e. governments have strong incentives to keep costs under strict control
D
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When a firm produces more output using the same inputs or the same output using fewer inputs we say that the firm
A) experiences positive technological change. B) will hire more workers in order to produce more output. C) experiences an increase in demand. D) is operating in the short run.
According to the Taylor rule ________
A) expectations are formed in an adaptive fashion B) the central bank should set its federal funds rate target by a formula that puts weight on both output and inflation gaps C) a constant growth rate rule for money should be adopted D) expectations should be formed consistent with the model of rational expectations
The marginal cost of hiring the 4th worker is
a. $40 b. $100 c. $20 d. $0
Would you expect a tax on cigarettes to be more effective at discouraging consumption over the long run or the short run?
A. Long run because demand becomes more elastic over time B. Long run because demand becomes less elastic over time C. Short run because demand becomes more elastic over time D. Short run because demand becomes less elastic over time