The economist that devised a method for setting the level of a public good efficiently is:
A. John Nash.
B. Arthur Cecil Pigou.
C. Ronald Coase.
D. Theodore Groves.
D. Theodore Groves.
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Automatic stabilizers drive changes in
a. the total deficit. b. the cyclical deficit. c. the structural deficit. d. monetary policy. e. both b and c.
Which of the following is the primary cause of inflation?
a. an increase in the quantity of money b. an increase in government spending c. an increase in unemployment d. an increase in productivity
Suppose 40 percent of all potential workers are highly skilled and contribute $50,000 to the firm each year. The remaining 60 percent of potential workers are less-skilled and contribute only $30,000 to the firm each year. Schooling costs a highly skilled worker y per year, while it costs a less-skilled worker 2y per year. What range of y will support a signaling equilibrium?
A. $0 < y < $50,000 B. $5,000 < y < $20,000 C. $10,000 < y < $20,000 D. $5,000 < y < $10,000 E. $20,000 < y < $50,000
Suppose Jones's company and Smith's company both pollute. Under a system of marketable pollution permits, which of the following must be true in order for Smith and Jones to benefit from trading the right to pollute?
A. Smith and Jones must be able to reduce pollution at exactly the same cost. B. Smith and Jones must have different abatement costs. C. Smith and Jones must have a social conscience and must be devoted to pollution abatement. D. The government must direct Smith and Jones toward beneficial trades.