Economic bads are items
A. that individuals desire but which receive social disapproval.
B. for which the produced quantity is less than the amount desired at a positive price.
C. for which the desired quantity is less than what nature provides at a zero price.
D. that receive social approval but which governments dislike.
Answer: C
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What kind of game is shown in Scenario 13.11?
A) Axelrod's Paradox B) Stackelberg Match C) Prisoners' Dilemma D) Cournot's Duopoly Game E) It is not possible to tell what kind of game it is because the strategies have not been identified.
To correct for the social impact of pollution, the government should levy a per-unit tax
A) that is the same for all polluters regardless of their locations or sizes. B) according to the economic damage of the pollution. C) according to the business activity of the polluter. D) only to those polluters that can afford to pay for the tax.
A firm that screens candidates to determine how well they would work with limited supervision is afraid of facing
a. Adverse selection b. Moral hazard c. Forced bankruptcy d. None of the above
According to the interest-rate-based monetary policy transmission mechanism, an increase in the money supply will
A. lead to a decrease in investment spending and an increase in real GDP that is equal to the decrease in investment spending. B. lead to an increase in investment spending and a decrease in real GDP that is equal to the increase in investment spending. C. lead to an increase in investment spending and an increase in real GDP which is greater than the increase in investment spending. D. lead to a decrease in investment spending and an increase in real GDP which is greater than the decrease in investment spending.