Refer to Figure 6-10. The supply curve on which price elasticity changes at every point is shown in
A) Panel A. B) Panel B. C) Panel C. D) Panel D.
D
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What is meant by the term "rational ignorance"?
A) It refers to the fact that policymakers and their constituents have different ideas of what it means to behave rationally and each party deliberately ignores the other's view. B) It refers to the absence of a negative incentive, such as levying a fine for not voting, which results in low voter turnout. C) It refers to a situation where one policymaker deliberately approves legislation he does not support in exchange for a future favorable vote for his own cause. D) It means the lack of an economic incentive for voters to become informed about a pending vote.
Changing the price of a good will usually result in a negative externality
Indicate whether the statement is true or false
For which of the following medical goods or services is the income elasticity of demand largest?
a. Emergency services after a car accident. b. Measles shots. c. Physical examinations for life insurance applications. d. Medical tests to diagnose specific symptoms. e. Face-lifts.
Suppose that beef producers create a negative externality. What is the relationship between the equilibrium quantity of beef and the socially optimal quantity of beef?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.