Recall the Application about using value added to measure the size of Walmart to answer the following question(s). Explain why we should use Walmart's value added, not its sales, when analyzing its impact on the U.S. economy.
What will be an ideal response?
While Walmart's sales in 2017 was $481 billion, Walmart had to buy goods and services from many other companies. To get the true contribution of Walmart on the economy, we must subtract its cost of sales. By subtracting its cost of sales of $361 billion, Walmart's value added was approximately $120 billion.
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The supply-side motivated tax cuts of 1981 during the Reagan administration were aimed at
A) balancing the federal budget. B) decreasing aggregate supply. C) increasing aggregate demand. D) increasing aggregate supply.
As a result of moral hazard
A) both physicians and hospitals order more procedures. B) physicians and hospital administrators have no incentive to raise costs. C) patients increasingly have to worry about the expense of operations and other medical procedures. D) both physicians and hospitals have a financial interest in trying to keep hospital costs down.
Refer to the table below for an oligopolist’s dilemma. Gillette and Schick are two companies competing in the same oligopoly market. The profit payoff for Gillette is shown in the upper corner of each box, and the profit payoff for Schick is shown in the lower corner of each box. If they cooperate and undertake price collusion the most likely price charged by each firm will be
a. $8 charged by both companies.
b. $6 charged by both companies.
c. $8 charged by Gillette and $6 charged by Schick.
d. $8 charged by Schick and $6 charged by Gillette .
Which of the following constitutional provisions would help promote economic growth and prosperity?
A) the right of individuals and businesses to compete in markets B) protection of private property rights C) the right of citizens to freely engage in exchange with foreigners D) all of the above