(Consider This) The U.S. recession that occurred in 2008 and 2009 represented a case where:
A. government policy intervention effectively offset the negative demand shock and minimized
the effects on output and employment.
B. prices were somewhat flexible, so the impact of the demand shock was felt about the same
in terms of price and output changes.
C. prices were relatively flexible, minimizing the impact on total output and employment.
D. prices were relatively sticky and most of the impact was on total output.
Answer: D
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Suppose fairness is defined as those who receive the greatest benefits from government should pay the most in taxes, then which of the following taxation systems would be consistent with this notion of fairness?
a. User fees for national parks. b. Gasoline taxes to fund highway maintenance. c. A tax on the poor to finance food stamps and other low-income assistance programs. d. All of the above are consistent.
Kevin decided to buy a ticket for a baseball game four months early to make sure he could get it. However, when he tried to buy the ticket online, the game was already sold out. Which of the following is the best explanation?
a. the fallacy of composition b. ceteris paribus c. causation d. correlation
Refer to the graphs shown, which show indifference curve analysis with the associated demand curves.
The best explanation for a movement from point D to point E is:
A. an inward rotation of the budget constraint along the x-axis, forcing the consumer to move from point B to point A. B. an outward rotation of the budget constraint along the x-axis, allowing the consumer to move from point A to point B. C. an inward rotation of the budget constraint along the y-axis, forcing the consumer to move from point C to point B. D. a parallel shift of the budget constraint, allowing the consumer to move from point A to point C.
As a general rule of thumb, industries with a Herfindahl index below ________ are considered to be competitive, while those above ________ are considered noncompetitive.
A. 1,800, 1,000 B. 1,000, 1,800 C. 1,000, 3,000 D. 1,800, 3,000