When comparing market and public sector decision making, which statement is NOT true?
A) Self-interest is the motivating force in each decision making arena.
B) In both decision making sectors, majority rule is how things are done.
C) In both decision making sectors, there are scarcity constraints.
D) Collective (political) outcomes and economic outcomes may differ.
B
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Suppose the government establishes a price support for soybeans. The new government program will tend to
A) decrease the output of soybeans. B) increase the quantity demanded of soybeans. C) decrease the demand for soybeans. D) increase a farmer's opportunity cost of producing other commodities (such as corn), which could be grown on the same land used to grow soybeans. E) do none of the above.
Refer to the above figure. Which of the following points indicates an efficient use of resources?
A) a B) d C) e D) More information is needed to answer the question.
In order to simplify a complex situation, economic models often treat constraints as unalterable
Indicate whether the statement is true or false
Which of the following is a probable consequence of the presence of accounting rules that allow firms to hide the financial impact of actions that would harm investors?
a. Investors may be able to enforce market efficiency. b. The WTO will disenfranchise the country that allows this to happen. c. Investors will immediately organize a speculative attack and the price of stocks will inflate. d. The balance-of-payments deficit will increase, leading the economy into a debt trap. e. Investors may not be able to adequately judge when the risk of investing in a firm rises.