During a period of stagflation, should more emphasis be placed on reducing unemployment or on lowering the rate of inflation?
What will be an ideal response?
The answer to this question is a matter of student judgment. What action to emphasize in a particular case depends on the rates of unemployment and inflation. According to the Full Employment and Balanced Growth of 1978, however, the primary emphasis should be given to lowering unemployment. This would also seem to be the more popular viewpoint politically.
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Goods, such as L.A. Lakers tickets and parking spaces around the stadium, are sometimes consumed together. Which of the following would decrease the demand for parking spaces around the stadium?
A) An increase in the price of Lakers tickets B) A higher parking fee C) A decrease in the price of Lakers tickets D) A substantial increase in the price of local cab services
Why do people specialize and trade?
What will be an ideal response?
If a firm experiences economies of scope,
a. its average cost falls as it increases output b. its average cost rises as it increases output c. average production costs fall when it produces more than one kind of product d. it should integrate vertically e. average production costs rise as it produces more kinds of products
The prime minister of the tiny island nation of Wowza has proposed that the speed limit on its only highway be reduced by 10 miles per hour on Thursdays. Enacting this proposal would be optimal
A) only if the marginal cost of reducing the speed limit falls to zero. B) as long as the marginal benefit of reducing the speed limit is just equal to or greater than the marginal cost of reducing the speed limit. C) as long as the marginal cost does not rise. D) until the marginal benefit of this action is maximized.