Figure 6-1
illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. Programs that give subsidies to a small group of producers at general taxpayer expense would be considered
a.
type A projects, and the government would be likely to undertake these projects if they were efficient and to reject them if they were inefficient.
b.
type B projects, and the government would be likely to undertake many of these projects even when they were counterproductive (inefficient).
c.
type C projects, and the government would be likely to fail to undertake many of these projects even when they were productive (efficient).
d.
type D projects, and the government would be likely to undertake these projects if they were efficient and to reject them if they were inefficient.
b
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Average physical product measures the increase in total output that results from a one-unit increase in an input.
Answer the following statement true (T) or false (F)
In the United States, the reserve requirement is set by the:
a. Bank of America. b. federal government. c. U.S. Treasury. d. Federal Reserve Board. e. Department of Commerce.
In the early 19th century, the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic. The villagers noticed that wherever doctors appeared, people died. Therefore, many doctors were chased away from villages, and some were even killed. This reaction to the correlation between doctors and deaths is most likely a problem of
a. omitted variables. b. reverse causality. c. government propaganda. d. medical incompetence.
Katherine gives piano lessons for $20 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer's market. Katherine's accounting profits are
a. $100, and her economic profits are $100. b. $100, and her economic profits are $0. c. $0, and her economic profits are $100. d. $0, and her economic profits are $-100.