The economic theory of regulation treats politicians as:
A. public-spirited individuals who work for public welfare.
B. self-interested individuals who benefit themselves by supplying legislation.
C. corrupt individuals who sell contracts to the highest bidders.
D. people who only represent the minority segment of the population.
Answer: B
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When housing prices decrease, household wealth ________ and consumption ________.
A. increases; decreases B. increases; increases C. decreases; increases D. decreases; decreases
In setting an obligatory control on a polluting industry, the government
a. places a tax on the pollution b. creates pollution permits which could be sold on the open market c. creates private property rights for air d. establishes a limit on the amount of pollution a producer is permitted to emit e. offers a subsidy to the polluting firm
If Alex seeks to maintain a constant income level, and all workers in his industry, including Alex, get a wage increase, which of the following will always be true?
A. The substitution effect of the wage increase leads to less work B. The market supply of labor curve will be backward bending for Alex's type of work C. The income effect of the raise causes Alex to work more D. Alex will have a backward bending supply curve for his labor
A bond is
A. a document that formally promises to repay a loan. B. a share of ownership in a company. C. a promise to pay a dividend. D. a non-contingent payment.