According to William Baumol, many corporate managers engage in empire-building
Indicate whether the statement is true or false
T
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In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution, the pollution tax must be set equal to the
A) marginal private cost. B) marginal external cost. C) marginal social cost. D) marginal benefit of polluting. E) price of the good.
Consider the game known as the Prisoner's Dilemma. What's the dilemma?
a. By both not confessing, both get to the cooperative solution and minimize time in prison. b. By both confessing, both get to the noncooperative solution and both serve significant time in prison. c. As a group, they are better off cooperating by not confessing, but each player has an incentive to be first to confess in a double cross. d. The problem is that the spies should never have been caught; they should move to Rio.
Since the income elasticity for food is estimated to be 0.51, it appears that the proportion of income spent by poor people on food is ____ the proportion spent by those with higher incomes
a. greater than b. less than c. about the same as d. about half as great as
A country is said to have a comparative advantage in a good over another country if that first country:
A. Can produce more units of the good B. Is a more efficient producer of the good C. Is a major consumer of the good D. Has a lower opportunity cost of producing the good