Mutually Assured Destruction was a standing policy during the Cold War, in which the United States and the USSR maintained and expanded nuclear arsenals beyond practical levels. What could explain such a phenomenon?
A) insane public officials who were bent on world domination
B) a prisoner's dilemma
C) a leader-follower type game
D) tacit collusion
B
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Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. If Leo values income and not the source of the income, then if he can only earn $400 he will choose to:
A. not work and accept the benefits. B. not work and refuse the benefits. C. work part time. D. work.
National defense is a classic example of a public good because
a. there is no market for private security services. b. it is difficult to exclude people from receiving the benefits from national defense once it is provided. c. everyone agrees that some level of national defense is important, but only the government knows the optimal amount. d. there are no private firms willing to supply defense goods such as tanks and weapons.
Define monopsony
Marginal utility:
A. is the change in a consumer's utility resulting from the addition of a very small amount of some good. B. is the total utility a resulting from consuming some good, divided by the amount consumed. C. is the change in a consumer's utility resulting from the addition of a very small amount of some good, divided by the amount added. D. is the change in a consumer's utility resulting from the addition of a very small amount of some good, divided by the total amount being consumed.