The lemons problem is due to A) asymmetric information. B) moral hazard. C) hidden actions. D) symmetric information. ANSWER A
Date: September 9th, 2020
Once a government program is put into place, the employees of the bureau put in charge of administering the program _____. a. become profit maximizers b. begin working in the public interest c. start rent seeking d. become an interest group ANSWER d
Date: September 9th, 2020
If a bank offers mortgages that do not require the normal 20% down payment, the bank encourages A) people who know they might not pay off the mortgage. B) people who can’t afford the down payment but can pay off the mortgage. C) people who know that they are going to pay off the mortgage. […]
Date: September 9th, 2020
IRA stands for Individual Retirement Asset. a. True b. False ANSWER b
Date: September 9th, 2020
Assuming that progressive taxation is desirable, a consumption tax calculated by subtracting saving from income would be preferable to a general sales-based consumption tax. a. True b. False ANSWER a
Date: September 9th, 2020
What is one of the most important benefits of the Internet? A) The Internet has increased asymmetric information. B) The Internet has reduced asymmetric information. C) The Internet has increased moral hazard. D) The Internet has increased transaction costs. ANSWER B
Date: September 9th, 2020
The CB radio was very popular in the 1970s and 1980s for communicating while driving. People bought them because other drivers had them too and they could therefore talk with many others on their trips. This illustrates A) that the demand curve for CB radios was inelastic. B) the network effect. C) that CB radios […]
Date: September 9th, 2020
Conscription is a more advantageous way to obtain military personnel when _____. a. expenditures on welfare are low b. the conscripted are paid the same as a volunteer army c. the army is large relative to the size of the civilian population d. the country is a dictatorship ANSWER c
Date: September 9th, 2020
In contrast to a monopoly which misallocates resources by restricting output and producing too little, government bureaus misallocate resources by _____. a. producing too little b. producing too much c. producing the right amount but charging nothing for the output d. producing zero ANSWER b
Date: September 9th, 2020
Recently, many cities have attempted to pass laws taxing the sale of sugary drinks such as soda pop. If one of these laws passes, we would expect A) the supply curve for soda pop to shift to the right. B) the supply curve for soda pop to become more vertical. C) the demand curve for […]
Date: September 9th, 2020
