Answer the following statements true (T) or false (F)
1. Majority voting produces efficient outcomes because it takes into account the strength of the preferences of individual voters.
2. Majority voting on whether or not a public good should be produced could lead to a result where a public good whose costs are bigger than the benefits would end up getting approved by the voters.
3. If a public good provides social benefits that are greater than its costs, then majority of voters would always vote in favor of producing the good.
4. Special interest groups result from people with strong preferences on a particular issue banding together to let policymakers know their preferences.
5. Political logrolling, or vote-trading, can turn a potentially inefficient voting outcome into an efficient one.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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What will be an ideal response?
Using the data in the above table, the average total cost of producing 16 units per day is
A) $1.25. B) $6.25. C) $7.00 D) $7.50.
If an oligopolist is naïve, and therefore expect rivals not to respond if it chooses to cut its price,
a. It could start a price war b. It would be more likely to cut prices than an oligopolist that expected rivals to react if it cut its prices. c. It would be less likely to cut prices than an oligopolist that expected rivals to react if it cut its prices. d. Both a. and b. are true
Income effect results in _____
a. a change in the elasticity of demand of a consumer b. a change in the buying power of consumers c. a change in the opportunity cost d. a change in the permanent income of a consumer