As a result of the superb economics essay that you wrote during this quarter, you won the Adam Smith prize of $100. The receipt of these funds would be an example of
A. a pure substitution effect.
B. the income effect being stronger than the substitution effect.
C. a pure income effect.
D. the substitution effect being stronger than the income effect.
Answer: C
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Refer to Figure 8.1. If each player cooperated with one another, each player would find themselves ________ better off than they are by playing their dominant strategies
A) $0 B) $280 C) $490 D) $560
According to Garrett Hardin's view of The Tragedy of the Commons:
a. Externalities will be internalized by the market. b. Individuals will use the commons up to the point where marginal benefits equal marginal social costs. c. Individuals will create institutions to prevent the collapse of the commons. d. Individual will use the commons beyond the socially efficient point.
A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,
a. U.S. investment and GDP increase, but German GDP is unaffected. b. U.S. investment and German GDP increase, but U.S. GDP is unaffected. c. U.S. investment, U.S. GDP, and German GDP are unaffected, because tractors are intermediate goods. d. U.S. investment, U.S. GDP, and German GDP all increase.
Crowding out is most likely to occur when the federal government
A. Runs a deficit and raises taxes to generate more revenue. B. Runs a surplus and pays off part of the debt. C. Has a balanced budget and refinances a portion of the debt that matures. D. Runs a deficit and sells bonds to make up the difference.