Since the cost of using more of any resource is ________, viewing any resource's price as zero leads to ________.
A. negative; overutilization
B. positive; overutilization
C. positive; underutilization
D. positive; a surplus
Answer: B
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The informal sector is characterized by
a. firms that don't pay their taxes b. firms from other countries that are not subject to local laws c. firms producing illegal goods d. firms that are small and often able to avoid many government regulations e. all of the above
Robert Fogel's upper bound estimate of the social savings from the railroad industry came to about ____ of the GNP in 1890
a. 7 b. 15 c. 20 d. 120
A production possibilities frontier will be bowed out if
a. there is scarcity b. resources are used efficiently c. production of one good involves an opportunity cost d. resources are not perfectly adaptable to making each good e. technology is improving
Which of the following policies is most likely to encourage innovation, higher quality goods, and lower prices? I. Encouraging public-private partnerships II. Passing government regulations to reduce business failures and protect consumers III. Reducing barriers that limit entry of firms into new and existing markets
a. II and III b. III only c. I only d. I and II