The fastest growing part of the federal government budget since WWII is:
a. interest payments on the debt.
b. transfer payments.
c. defense spending.
d. infrastructure.
Answer: b. transfer payments.
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The Coase theorem states that
A. positive externalities are directly related to the weather-the better the weather, the more positive externalities. B. in the case of trivial or zero transaction costs, negative externalities are more likely to appear. C. when transaction costs are high, positive externalities will be minimized. D. in the case of trivial or zero transaction costs, the property rights assignment does not matter to the resource-allocative outcome.
Under limit pricing, the incumbent will produce:
A. less than the monopoly output and charge a price that is greater than the monopoly price. B. more than the monopoly output and charge a price that is greater than the monopoly price. C. more than the monopoly output and charge a price that is less than the monopoly price. D. less than the monopoly output and charge a price that is less than the monopoly price.
Assume that a monopolist faces a linear demand curve. If the firm is operating at an output level where marginal revenue is positive, the firm:
A. Has maximized total revenues B. Could raise revenues by raising prices C. Can always increase profits by lowering its price D. Is operating on the elastic portion of its demand curve
Those without any health insurance in the U.S. tend to be the following groups, except:
A. Those who are in excellent health and those with the poorest health B. Workers in small firms C. Minimum-wage workers D. Those receiving Social Security payments