Three persons, A, B, and C, will use a simple majority vote to determine whether some good will be purchased. Each person's "tax share" of the purchase price of the good will be $25. Person A receives $30 worth of benefits from the good, person B receives $26 worth of benefits from the good, and person C receives $2 worth of benefits from the good. It follows that __________ person(s) will vote
for the good, __________ person(s) will vote against it, and that the outcome is __________.
A) one; two; inefficient
B) two; one; efficient
C) one; two; efficient
D) two; one; inefficient
D
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The law of one price holds exactly only if
A) buyers have complete information. B) antitrust laws are being enforced. C) it is impossible for buyers to resell the good. D) transactions costs are zero.
Which of the following is the lowest rating given to an investment-grade bond by Moody's?
A) Aa B) A C) Baa D) B
Suppose Chris's marginal utility from the first taco he eats is 15, and his marginal utility from the second taco he eats is 12. One can infer that:
A. Chris should eat two tacos. B. Chris's total utility from eating two tacos is 27. C. Chris's average utility from eating two tacos is 27. D. Chris should eat one taco.
If the Fed increases the money supply, there will initially be
A) a surplus of money and the equilibrium interest rate will rise. B) a surplus of money and the equilibrium interest rate will fall. C) a shortage of money and the equilibrium interest rate will rise. D) a shortage of money and the equilibrium interest rate will fall.