Recall the Application about fire protection and the median-voter rule to answer following question(s).In the Application, a community will choose to purchase a firetruck and lower their fire rating if:
A. the decrease in the average fire insurance premium exceeds the increase in the average tax liability resulting from the purchase of the fire truck.
B. the increase in the average fire insurance premium exceeds the increase in the average tax liability resulting from the purchase of the fire truck.
C. the decrease in the average fire insurance premium less than the increase in the average tax liability resulting from the purchase of the fire truck.
D. the decrease in the average fire insurance premium less than the decrease in the average tax liability resulting from the purchase of the fire truck.
Answer: A
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Suppose two companies, Macrosoft and Apricot, and considering whether to develop a new product, a touch-screen t-shirt. The payoffs to each of developing a touch-screen t-shirt depend upon the actions of the other, as shown in the payoff matrix below (the payoffs are given in millions of dollars). 
Suppose Apricot makes its decision first, and then Macrosoft makes its decision after seeing Apricot's choice. What will happen if, before Apricot chooses, Macrosoft announces that it is going to develop a touch-screen t-shirt no matter what Apricot does?
A. Apricot will develop a touch-screen t-shirt, and Macrosoft will not because Macrosoft's threat is not credible. B. Both Apricot and Macrosoft will develop a touch-screen t-shirt because neither company will want to back down. C. Neither Apricot nor Macrosoft will develop a touch-screen t-shirt because they will both realize that they are in a no-win situation. D. Macrosoft will develop a touch-screen t-shirt, and Apricot will not because it's not in Apricot's interest to develop a touch-screen t-shirt if Macrosoft also develops one.
If a change in the tax laws leads to a $100 billion decrease in tax revenue, then aggregate demand
A) increases by $100 billion. B) increases by less than $100 billion. C) increases by more than $100 billion. D) decreases by $100 billion. E) decreases by more than $100 billion.
If the nominal GDP and real GDP of a country in a particular year are $5 trillion and $3 trillion, respectively, the value of the GDP deflator in this year relative to the base year is approximately _____
a. 150 b. 112 c. 167 d. 135
The Leontief paradox arose because Leontief's results indicated that in the United States physical capital was an export-oriented input.
Answer the following statement true (T) or false (F)