The figure above illustrates the marginal benefit and marginal cost of different quantities of national defense. What is the political equilibrium if voters are well informed?
A) 0 units
B) between 0 and 3 units
C) 3 units
D) 5 units
C
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Suppose hamburgers and hotdogs are substitute goods. Other things constant, a rise in the price of hotdogs would tend to
A) decrease the demand for hotdogs. B) decrease the demand for hamburgers. C) increase the demand for hotdogs. D) increase the demand for hamburgers. E) do any of the above, because nobody needs hotdogs or hamburgers.
The above figure shows the U.S. market for chocolate. With international trade, the gain in total surplus is equal to
A) area B. B) area A + area B + area C + area D. C) area B + area C + area D + area E. D) area C + area D. E) area B + area C + area D.
A difference between the efficiency wage and the opportunity cost of labor is largely determined by
A) the number of managers. B) the costs of monitoring employees. C) the use of computers. D) none of these choices.
When good X is produced, some people benefit. A free-rider problem arises when
a. the number of people who benefit is small and it is impossible to prevent anyone from benefiting. b. the number of beneficiaries is small and it is possible to prevent some people from benefiting. c. the number of beneficiaries is large and it is impossible to prevent anyone from benefiting. d. the number of beneficiaries is large and it is possible to prevent some people from benefiting.