Which of the following is a justification for transfer payments?
a) transfers can create a more ethically acceptable income distribution
b) income redistribution provides insurance against misfortune
c) poverty creates negative externalities such as crime and disease
d) myopic individuals make time-inconsistent saving decisions
e) all of the above
e) all of the above
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The prisoner's dilemma arises when people have an incentive to let others pay for the public good and then take advantage of those purchases made by others
a. True b. False Indicate whether the statement is true or false
Economists have found that entrepreneurs are likely to have subjective beliefs about the probability of entrepreneurial success that are higher than the actual objective probabilities. These beliefs are most closely related to which of the following behavior concepts?
a. People are overconfident b. People give too much weight to a small number of vivid observations. c. People are reluctant to change their minds. d. People are inconsistent over time.
Refer to the graph shown that depicts a third-party payer market for prescription drugs. If the co-payment is $2 per pill, what will be the quantity demanded?
A. 15 B. 30 C. 60 D. 45
A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in
A) a decrease in the equilibrium quantity of eggs and no change in the equilibrium price. B) a decrease in the equilibrium price of eggs and no change in the equilibrium quantity. C) a decrease in the equilibrium price of eggs; the equilibrium quantity may increase or decrease. D) a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease.