An example of a government policy to increase physical capital formation is:
A. the provision of publicly-funded education.
B. the construction of an interstate highway system.
C. government support for basic research.
D. maintaining a well-functioning legal system.
Answer: B
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Graph the MSB and MSC functions on the same diagram. Show the regionally-based set of standards (ALA and AREMAINDER) that should be recommended to achieve allocative efficiency in each region. Find the numerical value of each standard.
Los Angeles County has the worst urban air quality across all major metropolitan areas in the United States. Automobile emissions contribute significantly to this problem. Assume the California Air Resources Board is consideringwhether to set a uniform emission standard or a regionally-based emission standard, where one standard is set for Los Angeles County and another for the rest of the state. Marginal social benefits (MSB) and marginal social costs (MSC) for the two regions have been estimated as follows: MSBabatement in LA County = 500 ?0.75A MSBabatement in the rest of California = 150 ? 0.25A MSCabatementin all of California = 0.5A, where A is the level of abatement of automobile emissions, and MSB and MSC are in millions of dollars.
In a country with a working-age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?
A) 150 million B) 130 million C) 120 million D) 10 million
Movement of money to another country for fear of a sudden loss of value is
a. conditionality b. default c. debt service d. capital flight e. none of the above
The analysis of asymmetric information problems is called ________
A) adverse selection B) microeconomics C) cybernetics D) agency theory