The difference between the economic and political functions of government is that
A) the economic function is concerned with the Federal Taxation system while the political function is not.
B) the economic function is concerned with correcting for market failures while the political function is not.
C) the economic function is concerned with the reallocation of income while the political function is not.
D) the economic function encourages merit goods while the political function discourages demerit goods.
B
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What will be an ideal response?
Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is Kate's profit maximizing output?
A. 2,000 B. 1,333.34 C. 1,000 D. 4,000
Total surplus:
A. can never be negative.
B. is always zero in an efficient market.
C. can be negative when the market is not in equilibrium.
D. is greater than the sum of consumer and producer surplus.
The prisoner's dilemma demonstrates that
a. breaking out of prison may be too costly for most prisoners b. the opportunity cost of being a prisoner is indeterminate c. the dominant strategies followed by two prisoners may lead to disequilibrium that is unpredictable d. the weak strategy may be followed by both prisoners if the opportunity cost is low e. the dominant strategies followed by two players may lead to an equilibrium that is less not optimal for both players together