Congressman Localstuff always votes for a balanced budget amendment to the U.S. Constitution. He also always votes for spending bills supported by the leadership of his political party. Is this rational?
Congressman Localstuff's constituents probably are like most voters who favor a balanced budget and oppose deficit spending. Votes of the first type are politically popular back home; however, in Washington, power and influence are generally determined by party leadership. Voting for spending bills supported by this leadership will allow Congressman Localstuff to advance in the Washington power circle (appointment to key committees, committee chairmanships, etc.).
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________ is the process of determining terms of exchange by individual negotiations between a buyer and a seller
A) Backward induction B) Bilateral bargaining C) Arbitration D) Collective bargaining
The nation of Spritzland used to prohibit international trade, but now trade is allowed, and Spritzland is exporting wristwatches. Relative to the previous no-trade situation, total surplus in the market for wristwatches in Spritzland has increased
a. True b. False Indicate whether the statement is true or false
Which of the following statements is most correct?
A. The higher the deposit insurance limit the greater the risk of moral hazard. B. Deposit insurance limits do not impact moral hazard, they impact adverse selection. C. Increasing the deposit insurance limits above $100,000 would increase coverage for over 50 percent of all depositors. D. The higher the deposit insurance limit the lower the risk of moral hazard.
Examine Figure 37.1. What is the number of students educated in a market that has a subsidy equal to the external benefit? 
Figure 37.1
A. S* B. S' C. All who have any desire for it D. The answer is unknown from this diagram.