Which of the following is an example of a hidden characteristic? A) After purchasing life insurance, Billy joins the bomb squad. B) Only the owner knows about her car defects. C) Bobby let his employer know about his college degree. D) Sally provides her driving record to the car insurance company. ANSWER B
Date: September 9th, 2020
Determining the optimal level of military expenditures is easy because the preferences of the median voter a reflected in the vote for president a. True b. False ANSWER b
Date: September 9th, 2020
The Haig-Simons definition of income and the Fisher definition of income are virtually identical. a. True b. False ANSWER b
Date: September 9th, 2020
Which of the following is not an advantage of fiscal federalism? a. It allows people to “vote with their feet.” b. It facilitates intergovernmental comparisons. c. It increases the ability of government to bargain with bureaucracies. d. It can limit the costs of government programs to those who benefiting from them. ANSWER c
Date: September 9th, 2020
The above figure shows the long-run expansion path. The long-run average cost curve will be A) horizontal. B) downward sloping. C) upward sloping. D) vertical. ANSWER B
Date: September 9th, 2020
The Friedman-Savage utility function can explain why A) people buy automobile insurance. B) somebody becomes addicted to gambling. C) people become more risk averse as their wealth increases. D) people place small bets to have a chance at winning a large amount. ANSWER D
Date: September 9th, 2020
The first priority of national defense spending is the defense of economic interests abroad. a. True b. False ANSWER b
Date: September 9th, 2020
If adverse selection exists in a market, A) it increases consumer surplus but reduces producer surplus. B) it reduces consumer and producer surplus. C) it reduces producer surplus but has no impact on consumer surplus. D) it increases both consumer and producer surplus. ANSWER B
Date: September 9th, 2020
One advantage of fiscal federalism is that its decentralized nature _____. a. allows for more rigid rules b. gives voters more choice c. creates thousands of bureaucracies d. forces local governments to collude with one another ANSWER b
Date: September 9th, 2020
Tax laws treat all in-kind payments as taxable income to the employers. a. True b. False ANSWER b
Date: September 9th, 2020
