Detailed budgeting is not only time consuming, it reduces the flexibility of discretionary fiscal policy and is subject to political abuse
Indicate whether the statement is true or false
true
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If the price of hair styling increases, then
A) hair styling salons hire fewer workers but makes more profit. B) hair stylists demand an increase in wages and the salons hire fewer workers. C) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts leftward. D) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts rightward.
It seems quite possible that cigarette companies concealed information about the effects of smoking on health, causing cigarette prices to be __________ and cigarette sales to be __________ than would have been the case under symmetric information.
A. higher; higher B. higher; lower C. lower; higher D. lower; lower
According to the text, there is no such thing as a free lunch because
A. The producer must charge something to cover the cost of production. B. The government must raise taxes to pay for the lunches. C. No one would pay for lunch anymore if they could get it for free. D. Resources used to produce the lunch could be used to produce other goods and services.
Suppose an industry trade group has convinced legislators that a price floor should be used so that producer surplus is maximized in the market for milk. The group argues that such a policy would save the "family farm." Assuming a downward-sloping linear demand curve and a horizontal long-run supply curve, determine the resulting price, output and social welfare from such a policy. Compare this
result to the competitive equilibrium. What will be an ideal response?