An economist estimates that the maintenance of a public recreation center costs $80,000 a year and that the recreation center generates $65,000 a year in revenue from usage fees. From society's point of view, the maintenance of this recreation center is
A. potentially efficient because the value of the gains exceed the value of the losses.
B. potentially efficient because no one would be made worse off as a result of maintaining the recreation center.
C. inefficient, because everyone in the community pays taxes to support it, but only those who pay fees to use the recreation center benefit.
D. efficient because the revenues generated by the recreation center benefit the entire public.
Answer: C
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Figure 5-17
In Figure 5-17, which of the marked points would an economist use to help him construct a single demand curve for X?
A. A and B B. C and D C. A and C D. A and D
Income inequality increases as the Gini coefficient approaches 1
Indicate whether the statement is true or false
Central banks often intervene in currency markets. This activity is called
A) managed floating. B) fixing exchange rates. C) currency warfare. D) super-pegging. E) flexible floating.
The tradeoff between equity and efficiency is evident in debates over
a. how progressive our tax code should be. b. how generous our government spending programs should be. c. the debate over international trade policy. d. the debate over labor unions. e. all of the above.