Refer to the diagram for athletic shoes. If the current output of shoes is Q 3 , then:
A. society should produce fewer shoes to achieve the optimal allocation of resources.
B. society should produce more shoes to achieve the optimal allocation of resources.
C. resources are being allocated efficiently to the production of shoes.
D. shoes are more valuable to society than alternative products
A. society should produce fewer shoes to achieve the optimal allocation of resources.
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In markets-oriented systems an under-performing "entrenched" management is often replaced by
A) SEC regulators. B) a hostile takeover. C) stockholders electing a new board of directors to fire the managers. D) the bank that owns the firm firing them.
"As soon as a mayor announced his/her 'get tough on crime' policy on New Year's day, criminals got scared and the crime rate went down." Suppose that the lower crime rate was actually caused by freezing cold temperatures in January?it was just too cold for anybody to be out robbing other people. Which fundamental hazard of the economic way of thinking did the mayor make?
A. believing that what's good for one person is good for the whole group (the fallacy of composition) B. failing to take into account the benefits of crime (the payoff fallacy) C. believing that association is the same as causation D. failing to understand the difference between positive and normative economics.