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
The Coase Theorem states that _____. a. in the absence of transactions costs, the allocation of resource will be independent of property right assignment b. in the absence of transactions costs, the allocation of resources will be dependent on property right assignment c. with transactions costs, the allocation of resources will be independent of property […]
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
When government action is justified based on the argument that everyone agrees to be coerced _____. a. we cannot be sure that everyone is in favor of the action b. the same justification is true of market exchange c. we can be sure that the current state of affair is Pareto efficient d. the private […]
