Which of the following is likely to happen if the government lowers tax rates?
A) Price level will fall. B) Investment will decrease.
C) Consumption will increase. D) Unemployment will increase.
C
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Suppose that you have noticed that almost all of the car dealers in your city are located along a three-block stretch of the same street. A likely reason for this clustering of car dealers is that:
A. each dealer sells a different brand of car, so they are not competitors and do not have to be concerned about the other dealers' locations. B. the dealers are better able to form a cartel. C. there is a social norm in that city that dealers follow in choosing location. D. each dealer is attempting to locate closest to the customers.
When price is greater than average variable cost but less than average total cost at the profit-maximizing level of output, a firm should:
A) continue to produce the level of output at which marginal revenue equals marginal cost. B) increase output to minimize its losses. C) reduce output to the level at which price equals average variable cost to minimize its losses. D) shutdown to minimize its losses.
John is a 55-year-old male smoker, about 50 pounds overweight, who has high blood sugar and drinks to excess a couple of times each month. Because of adverse selection in health insurance,
A) John is less likely to buy health insurance than the average person, because the average person's policy premiums will be based on his risk, not the average risk. B) John is more likely to buy health insurance than the average person, because his policy premiums will be based on the average risk, not his personal risk. C) when John gets health insurance, he will be less likely to take care of himself. D) when John gets health insurance, he will be more likely to take care of himself. E) if John doesn't have health insurance already, he will not be able to get it.
Altruism describes:
A. a motive for action in which a person's utility is unaffected when another's utility increases. B. a motive for action in which a person's utility is decreased when another's utility increases. C. a motive for action in which a person's utility is increased when another's utility increases. D. a motive for action in which a person's utility becomes negative when another's utility increases.