Until the 1940s economics tended to focus on deductive reasoning. This can be attributed to the:
A. laissez-faire approach to the economy.
B. lack of computational power to analyze data.
C. fact that inductive reasoning was viewed as obsolete.
D. lack of quality economists.
Answer: B
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The value of marginal product (VMP) of an input such as labor is the
A) additional output produced by the last unit of an input. B) total revenue divided by the units of the input employed. C) extra revenue gained by selling one more unit of output. D) extra revenue gained by employing one more unit of the input.
Rational ignorance suggests that voters will
A) be ignorant about all issues. B) be ignorant about issues that are of no special interest to them. C) pursue information on all issues before voting. D) avoid voting if they have no information.
Laws that restrict the smoking of cigarettes in public places are examples of government intervention that is intended to reduce
a. efficiency. b. equality. c. externalities. d. productivity.
If the MPC = 0.5 and there is no crowding out, then the spending multiplier is
a. 2 b. 1 c. 4 d. 0.5