The Federal Reserve has policy instruments that it can aim directly at a specific category of asset price bubble
a. True
b. False
Indicate whether the statement is true or false
False
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In the figure above, a firm is operating at point A on the graph. At point A, the firm's average cost curve
A) has negative slope. B) has positive slope. C) is horizontal. D) is vertical.
The dead-weight loss from an excise tax:
a. is the difference between consumer surplus and producer surplus. b. is greater if demand is perfectly inelastic. c. is of little concern to policy makers since all excise taxes are "sin" taxes. d. is the lost surplus that results from higher prices and lower output resulting from the tax. e. is caused by a shift in consumer preferences when the tax is raised.
If laborers become more efficient over time, and if Company X would want to expand production, it would
A. substitute capital for labor. B. produce less product. C. hire more laborers. D. hire fewer laborers.
In some cases, social regulation may alter individuals' behavior. For example, there is evidence to indicate that as more automobile safety regulations have been introduced, more individuals have begun to drive recklessly. This phenomenon is known as
A) the feedback effect. B) the share-the-gains effect. C) the share-the-pains effect. D) the capture effect.