In the United States, which of the following is NOT a generally accepted economic function of government?
A) providing public goods
B) distributing consumer goods
C) ensuring economy-wide stability
D) promoting competition in the marketplace
Answer: B
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Consumption expenditure includes spending
A) on intermediate goods and services by firms. B) on office supplies by firms. C) by households. D) by households and spending on office supplies by firms. E) by governments when they are buying goods and services that consumers also buy.
Following World War I and World War II, the United States had a
A) small trade surplus. B) small trade deficit. C) large trade deficit. D) large trade surplus.
A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good
a. True b. False Indicate whether the statement is true or false
Suppose that Company A's railroad cars pass through Farmer B's corn fields. The railroad causes an externality to the farmer because the railroad cars emit sparks that cause $1,500 in damage to the farmer's crops. There is a special soy-based grease that the railroad could purchase that would eliminate the damaging sparks. The grease costs $1,200 . Suppose that the railroad is not liable for any
damage caused to the crops. Assume that there are no transaction costs. Which of the following characterizes an efficient outcome? a. The railroad will continue to operate but will pay the farmer $1,500 in damages. b. The railroad will purchase the grease for $1,200 and pay the farmer nothing because no crop damage will occur. c. The farmer will incur $1,500 in damages to his crops. d. The farmer will pay the railroad $1,200 to purchase the grease so that no crop damage will occur.