When social costs of an activity exceed private costs
A. this means that resources are being efficiently used.
B. there is a tendency for resources to be under-utilized.
C. there is a tendency for resources to be over-utilized.
D. None of these is correct.
Answer: C
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Rent seeking is best defined as attempts
A) by landlords to get tenants. B) to achieve monopoly power and the resulting economic profit. C) by individuals to avoid paying taxes. D) by owners of a monopoly to sell the firm.
In the Keynesian model, government spending is considered
A) a positive function of real GDP. B) a negative function of real GDP. C) to be a negative function of the real interest rate. D) to be autonomous.
A government that uses a bureau rather than a private firm to provide some good or service
a. may have less opportunity for officials and legislators to reward friends and supporters with jobs b. will always incur higher costs of production c. will lose the ability to make decisions via the hierarchy of the market d. may be better able to control details of production e. will not be able to sell the good or service after it is produced
Efficiency occurs in a market when
A) the sum of consumer surplus and producer surplus is maximized. B) consumer surplus is equal to producer surplus. C) consumer surplus is less than producer surplus. D) consumer surplus is greater than producer surplus. E) total revenue is maximized.