A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that
a. everyone has less incentive to work hard.
b. the rich will work harder while the poor will not.
c. the poor will work harder while the rich will not.
d. everyone in the middle class ends up worse off.
a
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If the U.S. government places tariffs on imports from countries that have been accused of deliberately undervaluing their currencies, the price of these imports will ________ and the demand for the undervalued currency will ________
A) rise; fall B) fall; rise C) rise; rise D) fall; fall
Refer to Scenario 10.2. Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price?
A) $90.00 B) $10.00 C) $55.00 D) $52.50
Suppose that there are only two fishermen, Zach and Jacob, who fish along a certain coast. They would each benefit if a lighthouse were built along the coast where they fish. The marginal cost of building each additional lighthouse is $150. The marginal benefit to Zach of each additional lighthouse is 90 - Q, and the marginal benefit to Jacob is 40 - Q, where Q equals the number of lighthouses. What is the efficient number of lighthouses?
What will be an ideal response?
Great Britain opted out of the ERM in 1992 because its government concluded that:
A) it wanted to increase its trade with North America rather than Europe. B) the gains from being a member of the ERM outweighed the costs from higher German interest rates. C) the costs associated with higher German interest rates outweighed the gains from being a member of the ERM. D) it was unable to agree with the French on an exchange rate between the pound and the French franc.