Risk-seeking behavior:
A. is an aspect of an individual's preferences.
B. is irrational.
C. is the same for everyone.
D. All of these statements are true.
Answer: A
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Which of the following statements about economic efficiency is not true?
a. Economic efficiency is equivalent to Pareto optimality. b. Economic efficiency can be determined normatively. c. Economic efficiency is superior to equity. d. Economic efficiency can be evaluated positively.
Prices usually reflect
a. only the value of a good to society. b. only the cost to society of making a good. c. both the value of a good to society and the cost to society of making the good. d. neither the value of a good to society nor the cost to society of making the good.
Which of the following will cause the LM curve to shift to the left?
A. A decrease in the average price level B. An exogenous decrease in money demand C. A contractionary monetary policy D. A reduction in the interest rates
When government corrects a market with an externality present by allowing participants to buy up to the point where their net benefit is zero, they must be:
A. offering a Coase tax. B. imposing a tax. C. imposing a tariff. D. mandating a quota.