Citizens of Tinytown are considering building a new park. If each voter in Tinytown has a reservation price that is less than the total cost of the park, then:
A. some sort of collective action by voters will be necessary to fund the park.
B. a private firm will have an incentive to build the park.
C. the park will never be built.
D. the benefit of the park is less than the cost of the park, so the park should not be built.
Answer: A
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Economists who study economic mobility have found that the income of a grandfather and his grandson's income are
a. not closely related. b. negatively related. c. directly related. d. equal.
Personal income taxes and transfer payments are examples of automatic stabilizers.
a. true b. false
Fiscal policy is enacted through changes in:
A. taxation and government spending. B. interest rates. C. unemployment and inflation. D. the supply of money.
Tie-in sales:
A. are legal under the Clayton Act. B. are the same as predatory pricing. C. were banned under the Hart-Scott-Rodino Act. D. are contracts that prevent purchasing one good without purchasing another.