Answer the following statement(s) true (T) or false (F)
1. Public choice economists feel that government activities are the result of individual behaviors.
2. Competition has been eliminated from the public sector.
3. The individual consumption–payment link is created by majority rule.
4. Most voters are extremely liberal or extremely conservative.
5. Ideally, voters in a democracy should know about the candidates and the issues.
1. True
2. False
3. False
4. False
5. True
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Which of the following is correct? The natural rate of unemployment
a. is a zero unemployment rate. b. has been steady at 3 percent over the past decade. c. is defined by Friedman as that rate of unemployment "in which everyone who wants a job can have a job." d. is the unemployment rate that exists in the long-run. e. None of the above
The market demand for an item is
a. the sum of individual demands. b. steeper for any given price change than the individual demand curves. c. independent of the number of individuals in the market. d. determined by dividing the quantity demanded by each individual by the number of individuals in the market.
The endowment effect in behavioral economics refers to how people:
A. value things more if they own them. B. are averse losses in a game of chance such as poker. C. avoid the loss of something of high value. D. prefer stock market gains over losses.
The price of a stock will decrease, ceteris paribus, when
A. People move money out of the bond market and look for other options. B. Terrorists cause people to be fearful. C. Congress makes sound budget decisions. D. Future earnings expectations increase.