If people are risk averse regarding environmental damages.
a. Low discount rates should be used
b. High discount rates should be used
c. Expected values will overstate ecological damages
d. Irreversible actions should be taken
e. They will generally approve of irreversible projects
f. All of the above.
g. None of the above.
Ans: a. Low discount rates should be used
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Are the owners of taxicabs in New York City earning large profits because the city severely restricts the number of licenses?
A) No, because the city also regulates fares. B) No, because the cost of owning a license absorbs the potential profit. C) Yes, because the number of licenses has not been increased for 50 years. D) Yes, because if they were not the number of taxicabs would decline and profits would rise. E) We cannot tell because profit arises from uncertainty.
Refer to Scenario 10.9. What is the maximum amount that Maui Macadamia would be willing to spend in order to maintain its monopoly through rent seeking?
A) 0 B) 1,800 C) 5,400 D) 10,800
To keep employees from shirking, you can invest in greater monitoring
a. even though monitoring is expensive b. especially when monitoring is not very efficient c. when employees fail to respond to incentive contracts d. when incentives solve both moral hazard and adverse selection problems with employees
In the short run, an increase in the price level causes:
A. a rightward shift in the aggregate demand curve. B. a leftward shift in the short-run aggregate supply curve. C. a rightward shift in the short-run aggregate supply curve. D. a movement upward along the short-run aggregate supply curve.