The decline in the percentage of the federal government’s budget devoted to national defense is evidence of the lack of new demand for U.S. military activity. 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
In 2000, total United States spending on national defense was less than five percent of GDP. a. True b. False ANSWER a
Date: September 9th, 2020
The above figure shows the payoffs to two airlines, A and B, of serving a particular route. Is there a Nash equilibrium? What is it? Explain. What will be an ideal response? ANSWER Firm A entering and firm B not entering is the Nash equilibrium. Entering is firm A’s dominant strategy. It will enter […]
Date: September 9th, 2020
Individuals conscripted into military service _____. a. are forced to work for less than the market wage b. bear a heavy tax burden c. are not necessarily those with a comparative advantage in being a soldier d. all of the above ANSWER d
Date: September 9th, 2020
An individual who is only willing to pay a relatively low amount for a particular good A) would fall in the upper portion of the demand curve. B) would fall in the middle portion of the demand curve. C) would fall in the lower portion of the demand curve. D) would not be considered part […]
Date: September 9th, 2020
The lemons problem is due to A) asymmetric information. B) moral hazard. C) hidden actions. D) symmetric information. ANSWER A
Date: September 9th, 2020
Once a government program is put into place, the employees of the bureau put in charge of administering the program _____. a. become profit maximizers b. begin working in the public interest c. start rent seeking d. become an interest group ANSWER d
Date: September 9th, 2020
