In a free market system, competition generates economic efficiency only when
A) individuals take into account the full opportunity cost of their actions.
B) consumers are motivated by a sense of the greater good, not their own self-interest.
C) firms are motivated by a sense of the greater good, not their desire for profit.
D) economic decisions are taken out the hands of individuals and placed in the hands of government officials.
A
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An average tax rate is calculated as
A) total taxable income × taxes paid. B) taxes paid ÷ total taxable income. C) (total taxable income - taxes paid) ÷ taxable income. D) total taxable income ÷ taxes paid.
If the actual unemployment rate is less than the natural rate of unemployment, there will be a tendency toward:
a. increased inflation and a leftward shift of the short-run Phillips curve. b. decreased inflation and a rightward shift of the short-run Phillips curve. c. increased inflation and a rightward shift of the short-run Phillips curve. d. decreased inflation and a leftward shift of the short-run Phillips curve.
When people donate money to a charity, they behave
A) rationally if the act gives them satisfaction. B) irrationally because the act does not benefit anyone. C) in an unpredictable manner because the act involves no incentive. D) in a way that only makes themselves worse off.
An example of an automatic stabilizer is
A. discretionary fiscal policy. B. consumer spending. C. inflation. D. unemployment insurance.