Q: How many economists does it take to screw in a light bulb? A: None. If the light bulb really needed changing, market forces would have already caused it to happen. This joke represents the view of
A) classical economists.
B) Keynesian economists.
C) economists who conclude that money illusion is widespread.
D) economists who conclude that wages and prices are inflexible.
A
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Suppose the government levies a per-unit tax on TVs, and this tax increases the price of TVs by $10. a. On a graph with TVs on the horizontal axis and "$'s of other consumption" on the vertical, illustrate how the budget constraint for a consumer with exogenous income changes as a result of the tax. b. Suppose you know the bundle on the after-tax budget that is chosen by the consumer. Illustrate on your graph how much in tax revenue the government is raising from this consumer. c. If the government replaced the tax on TVs with a lump sum tax that does not alter any prices but raises the same amount of revenue from the consumer, how would this consumer's budget constraint change?
What will be an ideal response?
Which of the following would be an example of a public good?
A. A candy bar. B. A painting by Monet. C. A taxi cab. D. A sunset.
People choose to do something:
A. when they believe the costs outweigh the benefits of the decision. B. when they believe their decision cannot be questioned by anyone else. C. when they believe it won't harm anyone and will better themselves. D. when they believe the benefits outweigh the costs of the decision.
Assel grows mulberry trees. The lumber yard purchases cut trees from you. The trees grow 1 foot per year. Assuming a constant real price per foot for mulberry, at what interest rate would Assel be willing to sell a 10-foot tree today?
A) 3% B) 5% C) 8% D) 12%