John Smith is a typical citizen. Economic theory suggests that he is likely to make a more informed choice when he buys a personal computer than when he votes for a congressional candidate. This view is
a. false because the actions of legislators will exert a greater impact on Smith's welfare than will the purchase of the computer.
b. false; Smith will tend to choose more carefully when he makes public choices than when he makes private choices.
c. uncertain; it would be true if, and only if, Smith's spending on personal computers exceeds his tax bill.
d. true; since Smith can decide what computer to buy, but his individual vote is very unlikely to decide the outcome of a congressional election, he has more incentive to inform himself about the computer than the congressional election.
D
You might also like to view...
Economists estimate that decreasing barriers to migration by just 5 percent will:
A. increase economic welfare of sending countries by trillions of dollars. B. decrease economic welfare of the countries that would lose their citizens to richer countries by trillions of dollars. C. decrease economic welfare of receiving countries by more than 5 percent. D. increase economic welfare by more than lifting restrictions on capital mobility in their entirety.
The slope of a demand curve is almost always
a. positive, because when people buy more of a good the cost of producing it will rise. b. positive, because the more money a person has, the more of a particular good will be bought. c. negative, because when people buy more of a good the cost of producing it will fall. d. negative, because with everything else equal, the same people will buy more of a good when its price is lower. e. positive, because as the price rises, people want to sell more of the good.
The typical family on the Planet Econ consumes 10 pizzas, 7 pairs of jeans, and 20 gallons of milk. In 2016, pizzas cost $10 each, jeans cost $40 per pair, and milk cost $3 per gallon. In 2017, the price of pizzas increased to $14 each, while the price of jeans and milk remained the same. Between 2016 and 2017, a typical family's cost of living:
A. remained the same. B. increased by 9 percent. C. decreased by 9 percent. D. increased by 40 percent.
Which of the following is a common long-run response for a firm that is making a profit in the short run?
a. It will invest more resources in other firms. b. It will cut back the firm’s resources. c. It will invest more resources in the profitable process. d. It will keep allocation of the firm’s resources the same.