A dominant strategy is one that:
A. maximizes profits.
B. is optimal under some conditions.
C. never yields a negative payoff.
D. is the best choice under all conditions.
Answer: D
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If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set
A) equal to the marginal private cost of production at the economically efficient level of pollution. B) equal to the amount of the deadweight loss created in the absence of a pollution tax. C) at a level low enough so that producers can pass along a portion of the additional cost onto consumers without significantly reducing demand for the product. D) equal to the marginal external cost at the economically efficient level of pollution.
A major contributor to a country's real rate of economic growth is its real GDP growth relative to its
A) inflation. B) unemployment rate. C) money growth. D) none of the above.
In which of the following scenarios would the Gini coefficient measure zero?
a. People earn the same income. b. John receives a wage of $1 per hour. c. The king ends up with all the nation's income. d. There is a one-to-one ratio of income to population. e. 100 percent of the income is held by 100 percent of the population.
Assuming the standard migration model is correct, estimates of the cost of moving can be as high as $300,000. What is likely the worst explanation for what this expense is so high?
A. People may place a high cost on leaving family and friends. B. People may place a high utility value on the cultural benefits and assimilation of their current location. C. People may attach a very high utility to the social amenities in one's birthplace. D. Moving companies typically charge tens of thousands of dollars to transport household goods from one location to another. E. The psychic costs of moving, for example, the uncertainty of making friends and adjusting to a new city, may be quite high for some people.