Draw a demand and supply curve for a competitive product, making sure to clearly label the axis. Give a brief explanation for why the resulting equilibrium is economically efficient. What will be an ideal response? ANSWER The level of output that maximizes the value of output to the economy is Q*. If Q is […]
Date: September 9th, 2020
The holdout problem occurs when _____. a. unanimity rule is required for any Congressional action b. free riding is prevalent c. individuals drafted into the military refuse to report d. any individual has the power to prevent collective action ANSWER d
Date: September 9th, 2020
Briefly list and discuss in turn the three limitations of the Pareto criteria. What will be an ideal response? ANSWER The first limitation of the Pareto criteria is related to the fact that a Pareto improvement requires that no one be harmed. In a country as large and as complex as the United States, […]
Date: September 9th, 2020
The holdout problem arises when unanimous approval among members of a group is required_____. a. for a Pareto efficient move to occur b. for a Pareto superior move to occur c. for government to decide to undertake the project d. for government to be able to levy the tax to fund the project ANSWER […]
Date: September 9th, 2020
While limited in their practical applications, the real value of the Pareto criteria is in allowing the public interest to be judged without making interpersonal utility calculations. a. True b. False ANSWER a
Date: September 9th, 2020
Every market exchange is a Pareto superior move. a. True b. False ANSWER b
Date: September 9th, 2020
The above figure depicts a short-run production function for Albert’s Pretzels. The marginal productivity of labor A) rises then falls as the amount of capital increases. B) falls then rises as the amount of labor increases. C) is greater than or equal to the average productivity of labor for all amounts of labor. D) is […]
Date: September 9th, 2020
If everyone agrees to a change, then the change will be a Pareto Superior move. a. True b. False ANSWER a
Date: September 9th, 2020
Which of the following is not a reason why government programs might fail to achieve their goals? a. Insufficient information to correctly achieve the goal. b. One policy goal is in direct conflict with another policy goal. c. Politicians respond to political incentives to deviate from the goal. d. Inability to use coercion to achieve […]
Date: September 9th, 2020
The free rider problem _____. a. leads to an understatement of demand for the good in question b. is beneficial because it leads to lower public spending c. is functionally equivalent to the transitional gains trap d. is more prevalent in small groups ANSWER a
Date: September 9th, 2020
