Which of the following is a sound economic reason why the government should subsidize your college education?
A. To help the school's monopoly power over private schools.
B. It is too expensive.
C. The profit motive would cause the private sector to overproduce education.
D. Third parties, other than yourself, benefit from you being educated.
Answer: D
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A decrease in the interest rate, other things being equal, causes a(n):
A. upward movement along the demand curve for money. B. downward movement along the demand curve for money. C. rightward shift of the demand curve for money. D. leftward shift of the demand curve for money.
The concept of laissez faire calls for government intervention if market failure is evident.
Answer the following statement true (T) or false (F)
Which of the following is the best example of a decreasing-cost industry?
A) the health care industry B) the personal computer industry C) the college-education industry D) the oil industry
Which of the following describes a situation in which a good or service is produced at the lowest possible? cost?
A) marginal efficiency B) productive efficiency C) allocative efficiency D) profit maximization