Which statement best describes a command economy?
A. The production of goods and services is determined primarily by markets, but the allocation of goods and services is determined primarily by government.
B. The production and allocation of goods and services is determined primarily through markets.
C. The production and allocation of goods and services is determined primarily through government.
D. The production of goods and services is determined primarily by government, but the allocation of goods and services is determined primarily by markets.
Answer: C
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Dale just won tickets to see a NASCAR race. His coworker offers to pay him $200 for them, but Dale decides to use them, even though he would not pay $200 for them himself. Dale's willingness to consume $200 worth of tickets that he doesn't value at $200 is attributed to:
A. the explicit cost of ownership. B. the high fungibility of money. C. his refusal to ignore the sunk cost of the tickets. D. None of these is correct.
A negative externality
a. is a cost to a bystander. b. is a cost to the buyer. c. is a cost to the seller. d. exists with all market transactions.
What is the flypaper theory of tax incidence? This theory is typically wrong. Why?
What will be an ideal response?
Keynes believed
A. once a recession began, it would always turn into a depression. B. full employment GDP was a rare occurrence. C. the expected profit rate and the interest rate were equally important in determining the level of investment in an economy. D. inflation was a persistent tendency of the economies of his day.