What is one potential problem with nationalized health care?
A) It might not reduce moral hazard.
B) It is guaranteed to solve the principal-agent problem.
C) It would be efficient in risk bearing.
D) It might cost too much.
A
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In which of the following situations would a negative externality most likely be involved?
A. It is night and Kenneth is sitting in his easy chair reading a novel by John Grisham. The lamp he is reading by has only a 40-watt light bulb. He is having a hard time reading. B. Alyson lives near an airport. At five o'clock in the morning every day she can hear the airplanes taking off and it awakens her. C. Lucy went to a fancy restaurant last night and ordered the most expensive meal on the menu. She hated it. D. Richard is taking an economics class from Professor Franklin. Professor Franklin often says things that confuse Richard.
Each of the following provides incentives to reduce a negative externality except:
a. merger with affected firms. b. subsidizing consumption of the good being produced. c. bargaining among firms. d. taxation of the externality.
The law of diminishing returns applies to which of the following segments of the marginal product of labor curve?
a. The entire curve. b. The downward-sloping segment only. c. The upward sloping segment only. d. The point where labor input is zero.
One of the reasons that President Bush advocated for the 2003 tax reform was
a. to create a ‘stimulus package' to counter a deepening of the recessionary phase ofthe business cycle b. to stem the growing rate of inflation c. to provide the revenues to fight the war on terrorism d. to curb the outflow of revenue to foreign countries by reducing trade imbalances e. to reduce the government deficit