Which of the following is a source of government failure?
A) The lack of bureaucracy in government.
B) The invisible hand.
C) The enormous size and scope of government.
D) Excessive flexibility.
C) The enormous size and scope of government.
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When housing prices fell as they did beginning in 2006 following the housing market bubble, most banks and other lenders ________ the requirement for borrowers, making it ________ for potential home buyers to obtain mortgages
A) tightened; harder B) eased; easier C) eased; harder D) tightened; easier
Firms that have high cost of monitoring, choose their employees much more carefully because
a. They are afraid that the employee would be too productive b. They are more confident that after getting the job, the employee would not shirk c. They are afraid that without screening, the employee would be more likely to shirk d. B & C
Aiden must decide whether or not to go to law school. He knows that he can earn $50,000 per year with his bachelor's degree, but he expects to earn a minimum of $58,000 per year with the law degree. An economist would advise him to
a. take the job that just requires the bachelor's degree. b. go to law school, but only if he can finish within 3 years. c. go to law school. d. consider costs, revenues, and any nonmonetary job considerations he might have also.
For a given set of prices, two consumers choose bundles that are off the contract curve. In a competitive market,
A) prices will adjust until the consumers choose bundles that are on the contract curve. B) the indifference curves will shift back to the contract curve. C) the contract curve will shift to connect these bundles. D) no adjustments need to be made.