Government failure may result from
A. Accurate valuations of benefits but inaccurate valuations of costs.
B. Operational inefficiency by the public sector only.
C. Misallocation of resources only.
D. Outright waste of resources by the public sector or misallocation of resources.
Answer: D
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The government proposes a tax on halogen light bulbs. Sellers will bear the entire burden of the tax if the
A) demand curve for halogen bulbs is vertical. B) demand curve is downward sloping and the supply curve is upward sloping. C) supply curve of halogen bulbs is horizontal. D) demand curve for halogen bulbs is horizontal.
Most economists believe that
a. speculation on financial markets reduces their efficiency and should either be abolished or heavily regulated. b. speculation on financial markets does not need to be regulated because it has been largely eliminated by regulations on program trading. c. speculation socially benefits financial markets but harms nonfinancial markets. d. speculation helps both financial and nonfinancial markets function more efficiently.
_________is a cost that changes when the business rate of operation or output changes.
Fill in the blank(s) with the appropriate word(s).
When the marginal product of labor is greater than the average product of labor, the
A) marginal product of labor must be increasing as labor increases. B) average product of labor must be increasing as labor increases. C) total product must be increasing at an increasing rate as labor increases. D) None of the above answers is correct.