The MPC can be used to predict the effect of a tax increase.
Answer the following statement true (T) or false (F)
True
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The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle is called
A) the mean (or average) voter theorem. B) the median voter theorem. C) the voting paradox. D) the Arrow impossibility theorem.
If consumption of education creates an external benefit, then in order to increase efficiency relative to the outcome determined by private decisions,
a. more education must be produced. b. the same amount of education must be produced, and the price should be lower. c. less education must be produced, and the price should be higher. d. less education must be produced, and the price should be lower. e. less education must be produced at the same price.
A firm that can sell as much as it can produce at the market price is likely operating in:
A. a perfectly competitive market. B. a monopoly. C. a monopolistically competitive market. D. an oligopoly.
Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. Which of the following statements is TRUE?
A) Under both the capture theory and the share-the-gains, share-the-pain theory profits will decrease. B) An increase in price will occur quicker in the share-the gains, share-the-pain theory than the capture theory. C) An increase in price will occur quicker in the capture theory than the share-the-gains, share-the-pain theory. D) In the capture theory there will be an increase in price but not in the share-the-gains, share-the-pain theory.