According to the endowment effect, people are unwilling to sell a good they already own in which of the following situations?
a. if they are offered a price greater than the price they would pay if they did not already own the good
b. if they are offered a price lower than the price they would have to pay to replace the good
c. if they can't replace the good
d. if the good was a gift that had great sentimental value
a. if they are offered a price greater than the price they would pay if they did not already own the good
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Assume the production of a good gives rise to external benefits. The government may increase efficiency by
A) subsidizing consumption of the good. B) requiring all producers of the good to be licensed. C) taxing production of the good. D) imposing taxes on the good.
All of the following are positive statements EXCEPT
A) the President of the United States in 2008 was George W. Bush. B) California is in the United States. C) migratory birds fly south for the winter. D) a dog is man's best friend.
Which of the following is a free rider?
a. Butch breeds the feared pit bulls, and his neighbors now erect fences around their property. b. Fred watches many public television programs, but he has never sent in a contribution. c. Barry steals candy from the store where he works. d. Betty regularly uses the local public library. e. Joe drives 20,000 miles a year on public streets, but he pays no more in taxes than Sam, who only drives 1,000 miles.
Tax loopholes serve to
A. improve the incomes of the poor. B. erode the progressivity of the income tax. C. increase the progressivity of the income tax. D. decrease work incentives for the poor.