Figure 7-3
?
Government provides many goods and services to the public because they are not provided by free markets. Some economists believe bureaucrats who manage the programs have no interest in maximizing net benefits (profits) but instead maximize the size of a program constrained only by the need to have total benefits exceed total costs. Figure 7-3 shows total benefits and cost curves for a program. What point is the efficient point, and what point will the bureaucrat choose?
A. A and B, respectively
B. B and D, respectively
C. D and C, respectively
D. D and A, respectively
Answer: B
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According to your text, the economic way of thinking focuses on
A) actions, interactions, and consequences. B) intentions, motivations, and results. C) hypothesis generation, determination of control group, and testing of hypothesis. D) id, ego, and superego.
If one euro nation is experiencing rapid growth and inflation while another is facing sluggish growth and recession:
A. the two countries will disagree about the monetary policy that ought to be employed by the European Central Bank. B. the European Central Bank ought to employ a tight monetary policy. C. the European Central Bank ought to employ an easy monetary policy. D. only an appreciation of the euro can help both countries simultaneously.
Describe Leontief's paradox.
What will be an ideal response?
The largest category of financial intermediary is the
A) commercial banks. B) savings-and-loans. C) insurance companies. D) mutual funds.