Rational ignorance about the efficient quantity of a public good can result in
A) the principle of minimum differentiation.
B) excludable goods.
C) bureaucratic overprovision of a good.
D) the vertical summation of individual's marginal benefit curves.
C
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For a perfectly competitive firm,
a. P = MR at all output levels b. P = MR at the profit-maximizing quantity only c. P > MR at all output levels d. P < MR at the profit-maximizing quantity only e. P < MR at all output levels
When the government decides to add a fighter aircraft to national security, it
a. builds it in its own defense factories b. commandeers the resources (labor, capital) and uses them to build the plane c. must go to the Fed for the money to buy the aircraft since the Fed is the agency that creates money d. taxes its people and pays an aircraft company to make a plane e. taxes Boeing to produce the Boeing aircraft
Financial intermediaries, through their ability to lower transaction costs:
A. increase the amount of trading that occurs in an economy. B. allow for people to be more self-sufficient. C. reduce the number of financial transactions that occur. D. take people away from their comparative advantage.
The present value of $1,500 received 8 years in the future would be calculated as which of the following when the interest rate is 3%?
A) 1,500/(1.03)8 B) 8.03/1,500 C) 1,500 × 1.3 × 8 D) 1,500/(1.3)8