"Now that Terrance paints the broad surfaces and I do the trim work, we can paint a house in three-fourths the time that it took for each of us to do both." This statement most clearly reflects
a. the importance of secondary effects.
b. the fallacy of composition.
c. the law of comparative advantage.
d. behavior inconsistent with economizing.
C
Economics
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As the level of competition in an industry increases, the price-cost margin approaches:
A) 0. B) 1. C) 10. D) infinity.
Economics
Critics of the Federal Reserve maintain that, to correct the credibility problem of monetary policy, the Fed should:
a. tighten monetary policy. b. be required to maintain a growth rate of the money supply that is fixed by law. c. give more power to the Federal Open Market Committee. d. ignore public opinion and establish more discretionary power over monetary policy. e. merge with the U.S. Treasury and be dissolved as an independent agency.
Economics