Answer the following statement true (T) or false (F)
1) The Securities and Exchange Commission's supervision of Wall Street financial firms is a
possible example of regulatory capture.
2) Economists widely support deregulation of industries that tend toward monopoly or generate
substantial negative externalities.
3) Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory
agency that can or has been captured.
4) Government loan guarantees tend to socialize gains and privatize losses.
5) Government guarantees that socialize losses and privatize gains tend to encourage risky and imprudent investment.
1) T
2) F
3) T
4) F
5) T
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Suppose everyone in a town prefers spending on improved public transportation systems instead of public parks, and prefers spending on public parks instead of building a public zoo. An ideal voting system would ensure that:
A. public transportation spending could beat zoo funding. B. zoo funding could beat public transportation. C. public parks could beat transportation spending. D. zoo funding could beat public parks.
A depreciation of Israel's currency (the shekel) means that
a. Israel's exports will become more expensive b. Israel's imports will become more expensive c. Israel's imports will become less expensive d. it now requires fewer shekels to exchange for one unit of another currency e. it now requires more of other currencies in exchange for one shekel
If a firm's average total cost is less than price where MR = MC
A) the firm should shut down.
B) the firm should cut back on its output to lower its cost.
C) the firm should continue to produce the output it is producing.
D) the firm should raise its price.
The three problems with determining whether an equal income distribution is fair include all of the following except:
A. income differences and wealth differences are not the same. B. people's efforts differ. C. people don't start from equivalent positions. D. people's needs differ.