Economic analysis indicates that growth in the size of government as a share of the economy will
a. always reduce economic growth and reduce the living standards of the citizenry.
b. enhance economic growth and lead to higher income levels as it becomes larger and larger.
c. initially promote growth as the government focuses on core functions, but deter growth as government becomes larger and larger.
d. initially reduce economic growth, but eventually government will enhance growth as it becomes larger and larger.
C
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In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
A payoff matrix shows:
A. the payoff to being a perfectly competitive firm. B. the demand curve facing a firm when there are only two firms. C. the payoff to being a monopolist. D. the payoffs for each possible combination of strategies.
Referring to Table 4.2, Box F should be filled with 
A. $0. B. $30. C. $40. D. $10.
Since trash generation involves an externality, the way economists might address the problem of trash generation that is most likely to be optimal is by:
A. not allowing persons to throw away more trash than is acceptable as a maximum. B. having the government require mandatory sorting and recycling of trash. C. integrating the cost of the externality into the initial price of the good. D. having the cost of the externality be paid by the government.