Father says, "Earn a B-average on your next report card and I'll help you buy a car." An economist would say that this parent is providing his child a(n)
A) study disincentive.
B) reason to slack off and not worry about her grades.
C) bribe.
D) incentive.
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Suppose that milk producers expect that the price of milk is going to drop next week. This would cause
A) a decrease in the supply of milk today. B) an increase in the supply of milk today. C) an increase in the demand for milk today. D) the selling price of milk to rise today.
Which of the following statements is not correct?
a. The government may use antitrust laws to prevent a merger if the government believes the merger will reduce competition and increase prices. b. By regulating a natural monopoly where price equals average total cost, the monopoly earns zero profits. c. An advantage of private ownership over public ownership is that private business owners tend to fire inefficient managers. d. The government should always intervene to improve monopoly inefficiency.
The questions resolved by an economic system include what goods and services to produce, how they will be produced, and for whom they will be produced
Indicate whether the statement is true or false