If the production of a product or service involves external or spillover benefits, then the government can improve efficiency in the market by:
A. imposing a corrective tax to correct for an overallocation of resources.
B. providing a subsidy to correct for an underallocation of resources.
C. imposing a corrective tax to correct for an underallocation of resources.
D. providing a subsidy to correct for an overallocation of resources.
Answer: B
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Health Care is not like other goods and services because
A. people go to the doctor to find out what is wrong, whereas they get other services knowing more about what they need. B. there is no motive to consume more than is economically efficient. C. people do not have to pay for it. D. we tend to like to go to the doctor and do it for enjoyment, whereas we hate going to the dentist.
When compared with other governments around the world, government spending in the United States as a percentage of GDP_____
a. is generally lower than similar countries b. is generally higher than similar countries c. is about average relative to similar countries d. is impossible to compute because of differences between countries
What are the assumptions of the model of perfect competition? Explain why each is important for short-run and long-run equilibrium.
What will be an ideal response?
Unemployment insurance:
A. is offered in all countries. B. varies widely across countries. C. is most generous in the United States. D. has a set minimum in the United States, with some states being more generous.