The welfare rolls today are
A. much higher than they were in 1994.
B. A little higher than they were in 1994.
C. a little lower than they were in 1994.
D. much lower than they were in 1994.
D. much lower than they were in 1994.
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The spread between the interest rates on bonds with default risk and default-free bonds is called the
A) risk premium. B) junk margin. C) bond margin. D) default premium.
The most important implicit cost generally omitted from the accounting statement of a firm is the
a. rental cost of machinery. b. cost of compliance with government regulations. c. opportunity cost of the equity capital invested by the owners. d. accounting cost incurred as the result of tax compliance.
The classic example of adverse selection is the market for used cars
a. True b. False Indicate whether the statement is true or false
Suppose that for Jim the marginal benefit (MB) of producing is $60 and that the marginal cost (MC) of producing is $10. Suppose also that his marginal benefit of stealing is $50 and the marginal cost of stealing is $10. Is Jim currently maximizing utility in terms of producing and stealing? If not, should he produce more and steal less, or produce less and steal more to move toward utility
maximization? A) Yes, Jim is maximizing utility. B) No, Jim is not maximizing utility. Since the MB/MC ratio for producing is less than the MB/MC ratio for stealing, Jim should produce more and steal less. C) No, Jim is not maximizing utility. Since the MB/MC ratio for producing is greater than the MB/MC ratio for stealing, Jim should produce more and steal less. D) No, Jim is not maximizing utility. Since the MB/MC ratio for producing is greater than the MB/MC ratio for stealing, Jim should steal more and produce less.