The Coase Theorem implies that _____. a. absent transactions costs, resources will be efficiently allocated b. absent transactions costs, resources will be inefficiently allocated c. with significant transactions costs, resources will be efficiently allocated d. with significant transactions costs, resources will be inefficiently allocated ANSWER a
The figure above shows a graph of the market for pizzas in a large town. What characterizes the equilibrium in this market? A) There is excess supply at the equilibrium price of $7. B) The government has selected the appropriate price for pizzas. C) The quantity supplied equals the quantity demanded. D) Supply equals demand. […]
“Captured” regulators end up doing exactly what the regulated industry wants. a. True b. False ANSWER b
The above figure shows a graph of a market for pizzas in a large town. At a price of $10, the market A) is not in equilibrium. B) has excess supply. C) does not have excess demand. D) All of the above. ANSWER D
One reason why African elephants are endangered is _____. a. the low cost of hunting exhibitions b. exploitation by zoo owners c. many natural predators d. governments often prohibit private ownership ANSWER d
In the abstract, an omniscient government would have little power to move inefficient markets toward efficiency. a. True b. False ANSWER b
Which of the following is not a problem with poorly defined property rights? a. Insufficient incentive exists to produce resources that cannot be protected. b. Resources will tend to be underutilized. c. Individuals may be able to use resources without paying for them. d. Little incentive to conserve on the use of poorly defined resources. […]
Government’s monopoly on force implies that government can both protect and violate rights. a. True b. False ANSWER a
Property rights often remain poorly defined because of _____. a. difficulty enforcing ownership once defined b. government fiat c. strong incentives towards the status quo d. monopolies ANSWER a
The government protects rights in a market economy by providing national defense, a court system, and a well-functioning political system. a. True b. False ANSWER b
