The figure above shows Sam's budget line. Which of the following combinations of gasoline and coffee are not available to Sam?
A) 40 gallons of gasoline and 0 pounds of coffee
B) 32 gallons of gasoline and 4 pounds of coffee
C) 8 gallons of gasoline and 8 pounds of coffee
D) 16 gallons of gasoline and 16 pounds of coffee
D
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According to the Ricardian equivalence proposition, current deficits
A) will not affect consumption or national saving. B) will affect consumption but not national saving. C) will affect national saving but not consumption. D) will affect both consumption and national saving.
The distribution of surplus received from a subsidy offered in a market where a positive externality is present depends on:
A. how the subsidy is distributed among those affected by the externality. B. if those who are affected receive their true value of the externality. C. where the government gets the money to pay for the subsidy. D. None of these statements is true.
Which of the following problems associated with asymmetric information can be avoided by using a product warranty?
a. Lemons problem b. Problem of adverse selection c. Moral Hazard d. Problem of blind sight
The cost disease of the service sector in recent years is the result of
A. market failure. B. government intervention. C. collective bargaining by unions. D. uneven productivity growth.