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
What is one of the most important benefits of the Internet? A) The Internet has increased asymmetric information. B) The Internet has reduced asymmetric information. C) The Internet has increased moral hazard. D) The Internet has increased transaction costs. ANSWER B
Date: September 9th, 2020
The CB radio was very popular in the 1970s and 1980s for communicating while driving. People bought them because other drivers had them too and they could therefore talk with many others on their trips. This illustrates A) that the demand curve for CB radios was inelastic. B) the network effect. C) that CB radios […]
Date: September 9th, 2020
Conscription is a more advantageous way to obtain military personnel when _____. a. expenditures on welfare are low b. the conscripted are paid the same as a volunteer army c. the army is large relative to the size of the civilian population d. the country is a dictatorship ANSWER c
Date: September 9th, 2020
In contrast to a monopoly which misallocates resources by restricting output and producing too little, government bureaus misallocate resources by _____. a. producing too little b. producing too much c. producing the right amount but charging nothing for the output d. producing zero ANSWER b
Date: September 9th, 2020
Recently, many cities have attempted to pass laws taxing the sale of sugary drinks such as soda pop. If one of these laws passes, we would expect A) the supply curve for soda pop to shift to the right. B) the supply curve for soda pop to become more vertical. C) the demand curve for […]
Date: September 9th, 2020
The only way that consumption can be taxed is through a general sales tax. a. True b. False ANSWER b
Date: September 9th, 2020
John derives more utility from having $1,000 than from having $100. From this, we can conclude that John A) is risk averse. B) is risk loving. C) is risk neutral. D) has a positive marginal utility of wealth. ANSWER D
Date: September 9th, 2020
During the bureaucratic bargaining process, if the legislature tries to counteroffer by saying it wants less output at a given price, the bureau’s can employ the strategy of _____. a. saying no b. telling the legislature that reducing the output would endanger lives c. telling the legislature that at the lower output, the price per […]
Date: September 9th, 2020
