Which of the following is FALSE about public-sector decision making?
A) Decisions are based on majority rule.
B) The price charged to consumers is often less than its full opportunity cost.
C) Decisions involve no opportunity cost.
D) Incentives play a role in decision making.
C
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Answer the following statement(s) true (T) or false (F)
1. The slope of the budget line depends on the wage rate and the amount of human capital the worker has accumulated. 2. An increase in a worker's marginal productivity can cause an increase in the worker's non-labor income. 3. Human capital tends to increase over the course of a person's life. 4. Because people work more efficiently in periods of high productivity, they tend to work fewer hours because it does not take as long to complete assignments. 5. Unlike regular indifference curve analysis, that involving the labor consumption trade-off only includes income effects (not substitution effects) because labor only generates income.
According to the Coase theorem, which of the following are necessary for the efficient levels of pollution to be achieved? I. Property rights are defined. II. Transactions costs are low
A) I only B) II only C) both I and II D) neither I nor II
Assume that there is an improvement in the technology used by firms in a perfectly competitive industry that is initially in long-run equilibrium. In the short run this would cause:
A) an increase in the firm's economic profit. B) a decrease in the firm's economic profit. C) no change in the firm's economic profit. D) cannot be determined with the information given.
The Condorcet voting paradox applies to situations in which voters
a. decide between exactly two possible outcomes. b. decide among more than two possible outcomes. c. as a group have transitive preferences. d. choose the inferior candidate even though the majority preferred the better candidate.