According to the authors of your text, a politician's interest in getting reelected
A) expands the politician's time horizon.
B) leads the politician to concentrate on policies capable of generating short-run benefits.
C) further encourages the politician to conform more to acting in the public interest.
D) is based chiefly on selfish interest.
B
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With moral hazard, fair insurance contracts are not viable because
a. individuals' aversion to risk is reduced. b. insurance company's administrative costs are increased. c. individuals fear unscrupulous agents. d. probabilities of loss are increased over what is expected.
Will reducing pollution to zero in a particular industry be economically efficient?
a. Never b. Always c. Yes, as long the marginal costs of pollution reduction exceed the marginal benefits d. Yes, as long as the marginal benefits of pollution reduction exceed the marginal costs e. Yes, as long as the total benefits of pollution reduction exceed the total costs
Two major virtues of the market system are that it:
A. allocates resources efficiently and allows economic freedom. B. results in an equitable personal distribution of income and always maintains full employment. C. results in price level stability and a fair personal distribution of income. D. eliminates discrimination and minimizes environmental pollution.
Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 ? 2.5P and Qs = ? 20 + 1.5P, respectively. The government decides to impose a price ceiling of $50 per ton. What would be the resulting market distortion?
A. Surplus of 120 tons of fish B. Surplus of 175 tons of fish C. Shortage of 175 tons of fish D. Shortage of 120 tons of fish