When politicians support policies such as imposing punitive tariffs on imports, which are popular among voters but which also reduce economic efficiency, we refer to this as:
A. Regulatory capture
B. Voter failure
C. Limited and bundled choice
D. Paradox of voting
B. Voter failure
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Foreign investors may wish to purchase U.S. assets for all of the following reasons except one. Which is the exception?
a. The rate of return on assets is higher in the United States than in other countries. b. They may wish to diversify their portfolios. c. The United States may be regarded as a relatively safer place in which to invest. d. Governments of most other industrialized countries actively discourage foreign investment. e. With their increased foreign debt burdens, investment in developing countries has become less attractive.
A proponent of supply-side economics would advocate
a. reducing income taxes on saving. b. reducing tax credits for research and development. c. eliminating the depreciation allowance. d. increasing the corporate income tax.
Why is bad weather sometimes good news for farmers?
A) Bad weather shifts the supply curve of agricultural products leftward, driving up price and total revenue (assuming demand is inelastic). B) Bad weather shifts the supply curve of agricultural products leftward, driving down price, and raising total revenue (assuming demand is elastic). C) Bad weather increases the demand for and price of agricultural products. D) Bad weather increases both the demand for and supply of agricultural products.
A market failure is most likely to occur when:
A. many producers produce identical products, and only the consumers and producers are affected by the transactions. B. several producers of a good search for the lowest-cost method of production. C. a sole producer of a good faces no threat of competition. D. several producers of a good compete for customers by having price wars.