Typically, the ________ in a country, the higher the level of spending per person on health care.
A) higher the level of income per person
B) higher the level of income taxes
C) larger the population
D) lower the median age of the population
Ans: A) higher the level of income per person
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From the profit maximizing conditions for the Cobb-Douglas production function, we find that the optimal input demands for labor and capital may be related as L = brK/(aw). Under what conditions are the expenditures on capital and labor equal?
A) Constant returns to scale B) Increasing returns to scale C) Decreasing returns to scale D) a = b
When a market is characterized by an externality, the government
a. can correct the market failure only in the case of positive externalities. b. can correct the market failure only in the case of negative externalities. c. can correct the market failure in the case of both positive and negative externalities by inducing market participants to internalize the externality. d. cannot correct for externalities due to the existence of patents.
Market power is the power to:
A. control prices. B. gain another firm's customers. C. reduce price below cost to deter entry. D. control output.
The principal of neutrality states that, with respect to economic decisions, all taxes must be neutral.
Answer the following statement true (T) or false (F)