Regarding the institutional requirements of efficient markets,
a. Western economic theory ignores the operation of efficient markets
b. market economists have an almost perfect understanding
c. market economists would never take the necessary institutions for granted
d. those involved in a transition from centrally planned economy must develop a deep appreciation
e. None of the answers is correct
D
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Which of the following is not an argument in favor of restricting trade?
a. to preserve national security b. to prevent dumping c. to increase consumer surplus d. to protect infant industries e. to protect declining industries
Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers the firm produces 90 units of output. Fixed costs of production are $6 and the variable cost per unit of labor is $10 . The marginal product of the seventh unit of labor is 4 . Given this information, what is the average total cost of production when the firm hires 7
workers? a. $10.06 b. $9.64 c. 81 cents d. 70 cents
Vertical equity means that
A. people pay a flat rate. B. equal people are treated unequally. C. people across the income scale are treated fairly with regard to ability to pay. D. equal people are treated equally.
Suppose that the Anytown city government asks private citizens to donate money to support the town's annual holiday lighting display. Assuming that the citizens of Anytown enjoy the lighting display, the request for donations suggests that:
A. the display creates negative externalities. B. government should tax the producers of holiday lighting. C. resources are currently overallocated to the provision of holiday lighting in Anytown. D. resources are currently underallocated to the provision of holiday lighting in Anytown.