Consolidation or cooperation frequently occurs in the public sector. Give some reasons why local governments consolidating or cooperating through special districts might be problematic
What will be an ideal response?
The primary reason why local government consolidation or cooperation might be problematic is because it reduces intergovernmental competition, which gives consumers choice and increased inefficiency. Centralization of government services leads to the cartelization of government, where differences between governments is obscured or eliminated. While economies of scale might justify the creation of a special district on efficiency grounds, it is also likely that special interests will be able to play a more important role in a larger government as well.
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A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Which of the following is likely to cause flour mills to increase their demand for labor?
A) A decrease in the wage rate B) An increase in the wage rate C) An increase in the price of bread D) A decrease in the price of flour products
An increase in the wage rate of diamond cutters will increase the supply of cut diamonds.
Answer the following statement true (T) or false (F)
Refer to the figure. Assuming this market is representative of the economy as a whole, a positive demand shock will:
A. increase both the price level and the quantity of output produced.
B. increase output but leave prices unchanged.
C. lower the price level but leave output unchanged.
D. raise the price level but leave output unchanged.