Which of the following summarizes the "incentive problem" with gift-giving that Professor Tabarrok discusses in the video?
A. Gift-giving reduces the incentives for people to rely on market transactions.
B. When people choose gifts, they have little incentive to choose carefully.
C. When people buy gifts, they have an incentive to overspend to send a signal that they are generous.
D. People have little incentive to purchase a gift unless they expect a gift in return.
Ans: B. When people choose gifts, they have little incentive to choose carefully.
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If the Federal Reserve decided to include virtual money like Bitcoins in its measure of the money supply, what would be the effect on M1 or M2?
A) M1 would rise. B) M1 would rise and M2 would remain constant. C) M2 would rise but M1 would remain constant. D) M1 would fall.
The best known financial auction market is the
A) New York Stock Exchange. B) American Stock Exchange. C) Pacific Stock Exchange. D) Nasdaq.
A person's tax obligation divided by her income is called her
a. marginal social tax rate. b. marginal private tax rate. c. marginal tax rate. d. average tax rate.
Suppose Billy runs a baseball team but has far less money to pay players than other teams. So he figures out how to find overlooked players who are worth more than other teams realize. Billy pays these players less than other teams would be willing to pay if they knew how good they were. As a result, Billy’s team wins a lot of games without spending much on players. Which of the following is likely not true?
A. Billy’s rent will equal the payroll costs of other teams with a similar number of wins less his payroll costs. B. Billy’s rent will equal his payroll costs less the payroll costs of other teams with a similar number of wins. C. When rich teams realize how valuable these players are, they compete for the rent Billy is receiving by offering higher pay. D. When rich and poor teams realize how valuable the players Billy finds are, they compete for the rent Billy is receiving by copying his methods for evaluating players.