The table below shows how the payoffs to two political candidates depend on whether the candidates run a positive or negative campaign. The payoffs are given in terms of the percentage change in the number of votes received. 
Suppose that the Republican candidate tells the Democratic candidate that he intends to run a positive campaign. The likely result is that:
A. both candidates will run a positive campaign.
B. both candidates will run a negative campaign.
C. the Republican candidate will run a positive campaign, and the Democratic candidate will run a negative campaign.
D. the Republican candidate will run a negative campaign, and the Democratic candidate will run a positive campaign.
Answer: B
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A) moral hazard problem is diminished. B) moral hazard problem is enhanced. C) adverse selection problem is enhanced. D) None of the above answers is correct.
What is not true for a system of financial penalties for polluters?
A. Firms may be fined for pollution. B. Firms might have to pay a tax for each unit of pollution created. C. Firms would be encouraged to pollute less. D. Firms are always guaranteed the permit to pollute.
Which of the following is an example of trade policy at the national level?
a. Congress passing legislation to prevent dumping. b. The European Union adopting a common currency c. The World Trade Organization holding a round of negotiations in France d. The U.S. International Trade Commission
Almost all variation in living standards is attributable to differences in countries'
a. population growth rates. b. productivity. c. systems of public education. d. taxes.