Which of the following statements is false?
A) A government with the power to tax can solve the free rider problem.
B) A government with the power to tax can set a tax greater than the MEC when trying to change the market outcome into the efficient outcome.
C) A government with the power to subsidize can set a subsidy greater than the MEB when trying to change the market outcome into the efficient outcome.
D) Government can remove individuals from a prisoner's dilemma setting by changing the payoffs in the payoff matrix.
E) none of the above
E
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Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question
A) what B) how C) for whom D) where E) when
An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will
A) raise its price and decrease its output. B) lower its price and increase its output. C) raise its price and increase its output. D) continue to produce this level of output because any change will lower its profit.
The slope of the utility of wealth curve of a risk-averse person
A) increases as wealth increases. B) decreases as wealth increases. C) is constant. D) is negative.