A) Market failure.
B) Efficiency as long as there is some benefit.
C) Government failure.
D) Public choice theory.
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A) Have great productive efficiency and are always beneficial to society.
B) May be beneficial to society if they are allowed to act like monopolies without government interference.
C) May be beneficial to society if they are natural monopolies and are regulated.
D) Are never beneficial to society.
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A) An example of a public good.
B) Included in the market price of cigarettes.
C) An example of externality costs.
D) An example of government failure.
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A) Is consumed by one person and excludes consumption by others.
B) Experiences free riders.
C) Results in market failure when provided in markets characterized by laissez faire.
D) Is provided most efficiently by the government.
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A) Bicycles.
B) National defense.
C) Sidewalks.
D) The administration of justice.
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A) Excise taxes,Social Security payroll taxes,income taxes,and corporate taxes.
B) Corporate taxes,Social Security payroll taxes,income taxes,and excise taxes.
C) Income taxes,Social Security payroll taxes,corporate taxes,and excise taxes.
D) Social Security payroll taxes,excise taxes,corporate taxes,and income taxes.
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A) Inequity.
B) Externalities.
C) Market power.
D) Government failure.
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A) Indirect benefits from someone else's purchase of a public good.
B) Indirect benefits from someone else's purchase of a private good.
C) Direct benefits from someone else's purchase of a public good.
D) Direct benefits from someone else's purchase of a private good.
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A) Opportunity costs exceed the welfare benefits.
B) Benefits exceed the opportunity costs.
C) Benefits equal the costs.
D) Voters approve the project.
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A) There is substantial agreement about how and when markets fail.
B) There is substantial agreement about whether government improves market outcomes.
C) Voters are quick to blame government meddling for many economic woes.
D) Ideally,the market mechanism will lead an economy to the optimal mix of output.
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A) On its own may not always provide the optimal mix of goods and services.
B) Always provides the optimal mix of goods and services.
C) Always provides a better mix of goods and services without government intervention than it does with government intervention.
D) May not produce the optimal mix of output,which is known as government failure.
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A) The free-rider dilemma.
B) Market failure.
C) The problem of externalities.
D) Government failure.
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A) The mix of goods and services is on the production possibilities curve.
B) It is impossible for government intervention to improve the mix of goods and services.
C) The mix of goods and services is at the correct point on the production possibilities curve.
D) The mix of goods and services is the optimal mix.
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A) The governor of the state vetoes a highway bill even though the highway would enhance the value of property he or she owns.
B) The local police chief fails to give the mayor a speeding ticket because the mayor might fire him.
C) The president of Colombia goes after drug traffickers despite death threats and the offer of bribes that could make him a rich man.
D) A college president eliminates wasteful departments and programs even though this will shorten her tenure and her political future.
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A) Less than 1 percent.
B) 10 percent.
C) 25 percent.
D) 50 percent.
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A) Inequity.
B) Internalities.
C) Underproduction of public goods.
D) Production possibilities.
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