A major drawback to cost plus fixed fee contracts when compared to fixed fee contracts is _____. a. firms have an incentive to overbid b. the government must monitor the firm’s costs c. the government has an incentive to award bids to the worst companies d. there is an adverse selection problem ANSWER b […]
Date: September 9th, 2020
Adverse selection can occur when A) all persons involved in a transaction have full information. B) one person has information not available to others. C) post-agreement incentives result in workers shirking. D) nobody has any information about a particular product. ANSWER B
Date: September 9th, 2020
When an income tax has a progressive rate structure, _____. a. average tax rates are higher than marginal tax rates b. marginal tax rates are higher than average tax rates c. marginal tax rates are constant across all income ranges d. average and marginal tax rates are equal across all income ranges ANSWER b […]
Date: September 9th, 2020
Which of the following is not an incentive bureaucrats have to increase the size of their budgets? a. They can increase their income by having a higher budget. b. Increased budgets mean more power and prestige. c. Higher budgets are necessary to maximize scale efficiencies. d. A nice working environment is positively correlated with a […]
Date: September 9th, 2020
When costs are uncertain, a government might use a _____ contract, where the government pays the cost of the project plus an additional amount. a. fixed fee b. cost plus fixed fee c. cost plus percentage fee d. cost plus incentive fee ANSWER b
Date: September 9th, 2020
An increase in consumer incomes will lead to A) a rightward shift of the demand curve for plasma TVs. B) a movement upward along the demand curve for plasma TVs. C) a rightward shift of the supply curve for plasma TVs. D) no change of the demand curve for plasma TVs. ANSWER A
Date: September 9th, 2020
In the 1980s, marginal tax rates on high income taxpayers fell from 70 to 28 percent. Tax revenues coming from the top 1 percent of income earners _____. a. fell as a percentage of income b. fell in total, but not as a percentage of income taxes paid by all taxpayers c. fell compared to […]
Date: September 9th, 2020
If controlling the level of military expenditures is the most important goal, the most appropriate type of procurement contract would be _____. a. fixed fee b. cost plus fixed fee c. cost plus percentage fee d. cost plus incentive fee ANSWER a
Date: September 9th, 2020
Which of the following statements best summarizes why bureaucrats tend to be budget maximizers? a. The larger the budget, the more assured bureaucrats can be of having sufficient resources to complete a task. b. The larger the budget, the more power and prestige the bureaucrat wields. c. The larger the budget, the larger the workload […]
Date: September 9th, 2020
The percentage of additional income that will have to be paid in tax is an individual’s _____. a. marginal tax rate b. average tax rate c. proportional tax rate d. flat tax rate ANSWER a
Date: September 9th, 2020
