If rent seeking was, on average, a losing proposition, _____. a. rent seekers would exit rent seeking until losses from rent seeking equaled zero b. rent seeking would stop because it was no longer profitable c. rent seekers would increase competition for scarce benefits d. rent seeker would exit rent seeking until there is a […]
In the context of rent seeking, rents refer to _____. a. payments made to factors of production for private benefit that do not add anything to social output. b. payments made to politicians for private benefit that do not add anything to gross domestic product c. payments made to factors of production for private benefit […]
The backward-bending supply curve for labor occurs because _____. a. as wages increase, individuals pay higher taxes b. as wages increase, individuals consume more leisure c. as wages increases the number of hours worked increase d. as wages increase, employers cannot afford as many hours ANSWER b
One factor hastening the demise of the Soviet Union was _____. a. its military alliance with Cuba b. its attempt to keep up with the United States in an arms race c. its inability to predict the optimal amount of defense spending d. its strong economic output ANSWER b
The above figure shows three demand curves labeled D1, D2, and D3. Rank these three demand curves in terms of elasticity at a price of c. What will be an ideal response? ANSWER First, compare D1 to D2. Moving from price a to price c, dQ/dp = Q/(c – a). Elasticity equals Q/(c – […]
The _____ of an income tax comes from the _____ effect. a. excess burden; substitution b. excess burden; income c. excess benefits; substitution d. excess benefits; income ANSWER a
Which of the following statements is an example of agenda control? a. A governor vetoes a concealed carry law. b. A state legislature puts on the ballot a $500 million high-tech infrastructure initiative. c. A state education department implants a federal education law. d. A private citizen sues to prevent her home being taken through […]
Adding members to a military alliance _____ a. will always strengthen the alliance b. will cause the alliance to dissolve c. might weaken the alliance d. will always weaken the alliance ANSWER c
The deadweight loss of taxation from an income tax is because of _____. a. the inclusion of savings in the tax base b. the Laffer curve c. the income effect d. the substitution effect ANSWER d
Which of the following is not an example of agenda control? a. The assignment of members of Congress to committees. b. Determination of the ballot language of a tax-and-expenditure limitation initiative. c. Special interests deciding which members of Congress deserve their attention. d. The majority caucus decides who can run for Speaker of the House […]
