(Consider This) Unintended consequences leading to inefficient outcomes are more likely with government programs than in the private sector because:
A. in the private sector the invisible hand guides resources to their best uses when people
strive for efficiency.
B. government employees are systematically less competent than those in the private sector.
C. government has no real motive in allocating resources efficiently.
D. laws restrict government officials from considering effects of a policy outside the main
objectives of the policy.
Answer: A
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
The figure above shows the market for umbrellas in Sunville. Suppose one firm owns all umbrella stores in Sunville and charges $40 per umbrella. In this situation, the market for umbrellas is
A) efficient, with no deadweight loss but also no surplus. B) inefficient, with a deadweight loss of $2,666.67. C) inefficient, with a deadweight loss of $1,333.33. D) efficient, generating a total surplus of more than $10,000.
To determine whether two goods are substitutes or complements, an economist would estimate the:
a. price elasticity of demand. b. income elasticity of demand. c. cross-elasticity of demand. d. price elasticity of supply.
Which of the following statements about the minimum wage is correct?
a. An increase in the minimum wage enhances the well-being of all unskilled workers. b. An increase in the minimum wage has no effect on the well-being of middle-class families. c. Advocates of the minimum wage argue that the demand for labor is relatively inelastic. d. Critics of the minimum wage argue that it is an undesirable way of helping the poor because it is costly to the government.