Which of the following scenarios would support the theory of public choice?
A. A college president eliminates wasteful departments and programs even though this will shorten her tenure and her political future.
B. The local police chief fails to give the mayor a speeding ticket because the mayor might fire him.
C. The president of Colombia goes after drug traffickers despite death threats and the offer of bribes that could make him a rich man.
D. The governor of the state vetoes a highway bill even though the highway would enhance the value of property he or she owns.
Answer: B
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If demand is ________ with respect to price, a price increase will ________ total revenue.
A. inelastic; decrease B. inelastic; increase C. elastic; increase D. unit elastic; decrease
Proponents of cuts in income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that
A) workers are irrational. B) workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work. C) the opportunity cost of working is negative. D) the marginal cost of each additional work hour is not important to most workers. E) workers make decisions based on the social interest.
In the long run, an increase in the price level: a. increases output prices relative to input prices. b. increases the profit margins of many producers. c. increases RGDP supplied
d. Does none of the above.
A celebrity endorsement for a product that provides no information for the good is useless to consumers.
Indicate whether the statement is true or false.