Alfonso has noticed that increases in unemployment insurance claims are associated with recessions, and therefore he advocates limits on unemployment insurance so as to prevent recessions. Mary has noticed that most drug addicts once attended schools, and therefore she advocates getting rid of schools so as to prevent drug addiction
a. The reasoning of both Alfonso and Mary suffers from the omitted variable problem.
b. The reasoning of both Alfonso and Mary suffers from the reverse causality problem.
c. Alfonso's reasoning suffers from the reverse causality problem, and Mary's reasoning suffers from the omitted variable problem.
d. Mary's reasoning suffers from the reverse causality problem, and Alfonso's reasoning suffers from the omitted variable problem.
a
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Rent-seeking activities are socially wasteful because they use scarce resources but do not add to society's output
a. True b. False
If Best Paints and Paint with Us are paint suppliers in tacit collusion and Best Paints launches a new advertising campaign that states that it will meet any competitor's price on comparable paint, Best Paints might be tacitly signaling to Paint with Us that they are willing to ________.
A) raise their price B) lower their price C) maintain current the price D) cut price is exactly half