With a strong and active federal government, why do we need state and local governments?
Our model of government is one of fiscal federalism. The national government exists to provide services that the lower governments are unable to provide, such as national defense. The lower governments then provide services where they hold the comparative advantage, such as statewide public education and garbage pick-up. The idea is to place the government provider as close as possible to the people being served. This, it is hoped, will make the public entity responsible to the demands and changing needs of the voter.
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A recent medical study shows that peanuts are one of the leading causes of high cholesterol. This would cause the demand for peanuts to
a. Shift to the left b. Shift to the right c. go down the demand curve d. not change
Refer to the accompanying figure, which shows the market for cups of coffee. If all buyers' reservation prices increase by $1.00, then the equilibrium price of coffee would:
A. would not change. B. increase by less than $1.00. C. increase by more than $1.00. D. increase by $1.00.
Eli can decide between two jobs. One job is harvesting grapes at a local vineyard. He would earn $8 every hour he works there. He could also earn $7 an hour working as a bagger at the local grocery. Assuming Eli can only choose between these 2 jobs and that the benefits of both jobs are the same. If Eli decides to work at the grocery store as a bagger the opportunity cost every hour he decides to work at the grocery is:
A. less than $8. B. exactly $7. C. exactly $8. D. more than $8.
In a budget line, a simultaneous and proportional decrease in the price of the good on the y-axis and the good on the x-axis is graphically represented by:
A. a rightward parallel shift of the budget line. B. a steeper slope of the budget line. C. a leftward parallel shift of the budget line. D. a flatter slope of the budget line.