Which term is used when the price is above the equilibrium price?
a. shortage
b. surplus
c. equilibrium
d. no market
b. surplus
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A risk averse person will always buy insurance against risk
Indicate whether the statement is true or false
If taxes are already high, the lower the marginal excess burden of any additional taxes will be
a. True b. False
Public choice analysis
a. assumes individuals in the public sector seek to serve the public interest rather than their own personal interests. b. is the study of the decision making of individual actors (such as voters, politicians, and bureaucrats) in the public sector. c. suggests that individual voters have a greater incentive to become informed when making choices among political candidates than when making choices about the products they consume. d. finds that the individuals managing government agencies generally have a much stronger incentive to be efficient than do individuals managing private businesses.
One major consequence of the framing effect is that:
A. People may spend more to insure themselves against rare events, but leave themselves uninsured against more common events B. Someone could persist in pursuing a failed policy despite overwhelming evidence of the failure C. Major business projects may create bottlenecks in the organization because they are not completed as scheduled D. Decision-makers may make faulty decisions if they are lulled by the environment in which they are making their decisions