Timber producers destroy many acres of rainforests every year. To prevent deforestation, the government imposed a quota on the number of trees that were cut by the timber producers. The quota was imposed by the government to prevent _____
a. the free rider problem
b. the tragedy of the commons
c. asymmetric information
d. deadweight loss
b
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Economic theory predicts that people make choices in a manner that
A) makes them well liked by others. B) makes them better off. C) reflects the fact that resources are unlimited. D) shows that they do not respond to monetary incentives.
Public policy can help achieve more efficient use of an economy's resources by eliminating all monopolies
a. True b. False
The product life cycle theory of comparative advantage predicts that a new product will first be produced and exported by:
a. the nation that was first to demand the new product. b. the first firm to successfully copy the technology. c. the nation in which it was invented. d. the countries with the most stable economy and fewest restrictions on foreign trade. e. the company with the most extensive network of international distributors for the product.
The value of the expenditure multiplier in the long run is
a. 1 b. 0 c. -1 d. equal to the MPC e. equal to the 1/MPC