_____ has the primary responsibility for developing the early stages of the government's budget
a. The executive branch
b. The Treasury Department
c. The House of Representatives
d. The Senate
a
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A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?
a. Yes, because cutting hair is profitable. b. No, because he may not be able to sell more services. c. It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients. d. It depends on the average cost of serving more clients and the average revenue he will earn from serving more clients.
If there is a negative externality in production, ______.
a. firms bear the entire cost b. firms share the costs with others c. others bear the entire cost d. government bears the entire cost
Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus. Table 1.1Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost (Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)S0NA10 T1 9 U2 7 V3 4NAOn the basis of Table 1.1, what is the opportunity cost of producing at point S rather than point T?
A. 0.9 Stealth bombers. B. 1 Stealth bomber. C. 10 Stealth bombers. D. 1 B-1 bomber.
You value your favorite shirt at $100. Someone else values it at $80, and that person is willing to pay you $80 for your shirt. Would selling your shirt to this person for $80 be Pareto efficient?
A. Yes, because even though you lose from the trade and he gains, there is the potential for him to compensate you for your loss. B. Yes, because any time you engage in trade, the result must be Pareto efficient. C. No, the person paid you $80 for the shirt so his net benefit was $0, while your net benefit was -$20. For this change to be Pareto efficient, each of you should have the same net benefit. D. No, because both of you are not better off as a result of the trade.