An arms race is an example of a _____. a. positive externality b. inframarginal positive externality c. Coasean solution d. prisoners’ dilemma ANSWER d
Date: September 9th, 2020
The above figure depicts the Edgeworth box for two consumers, Al and Bruce. Explain why point “a” cannot be a competitive equilibrium. What will be an ideal response? ANSWER Point “a” cannot be a competitive equilibrium because at point “a”, Al and Bruce each have a different marginal rate of substitution. Since they both […]
Date: September 9th, 2020
In an arms race between two nations, both would be better off if _____. a. they could agree not to engage in the arms buildup b. if more countries entered the arms race c. one nation controlled more resources than the other d. a conflict broke out in another part of the world ANSWER […]
Date: September 9th, 2020
The sustainable flow of purchasing power available to an individual is equal to _____. a. the Fisher definition of income. b. the Haig-Simons definition of income c. consumption d. investment ANSWER a
Date: September 9th, 2020
Logrolling _____. a. impedes the work of special interest groups b. makes it easier for politicians to pass special interest legislation c. decreases the total quantity of special interest benefits d. does not depend on the rational ignorance of voters ANSWER b
Date: September 9th, 2020
Suppose TC = 10 + (0.1 q2). If p = 10, the firm’s profit maximizing level of output is A) 40. B) 50. C) 60. D) 0, since the firm will shut down. ANSWER B
Date: September 9th, 2020
Imputed rental income ____. a. is payment made by rental owners to facility management companies b. provides no value to the recipient c. is the dollar amount of the rental value of an owner-occupied home d. is the dollar amount of the rental value of a renter-occupied home ANSWER c
Date: September 9th, 2020
The effectiveness of a country’s military expenditures depends on _____. a. how much other nations spend in response b. whether or not they are in an arms race c. whether they have effectively estimated demand for national defense d. depends on the size of a country ANSWER a
Date: September 9th, 2020
In most elections, _____ impedes political exchange a. low transactions costs b. uncertainty c. the secret ballot d. special interests ANSWER c
Date: September 9th, 2020
If the value of your baseball card collection increases during a year, it would count as income under which of the following definitions of income? a. The Fisher definition of income. b. The Haig-Simons definition of income. c. The Laffer definition of income. d. The imputed collectible return definition of income ANSWER d
Date: September 9th, 2020
