econ part 3

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40 Terms
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its sunday and mason is ranking his choice of activities in order: studying for test on monday, playing video games, swimming with friends, or listening to music- what is the opportunity cost if he studies?
video games
if the constuction of a high speed rail project creates benefits of $20 billion while the coast is $45 billion, this indicates the project
should not be undertaken
the invisible hand - created by adam smith - is best described as:
prices direct suppliers towards production of goods that generate profits and consumers to purchase goods that improve their well being
raising min wage is the best policy to improve wages and employment opportunities in America. this is...
incorrect bc while some people will receive higher wages, others will experience less employment and fewer training opportunities
comp is present when
freedom of entry and rival firms are present in a market
In western states, local, state, and federal gov't have created publicly owned parks, forests, and monuments. This vast land can no longer be privately developed. What will the effect be on this policy.
the land will be used less productively than under private ownership
which is the best explanation for why the output per acre of small private plots in the former soviet union was about 16 times the output of state-owned farms.
when individuals were allowed to keep or sell te goods from priv plots, there was greater incentive to manage them properly
policies of Fannie may and Freddie mac during 1995-2008 encouraged mortgage originators to
lessen lending standards and extend more loans to low income and sub prime barrowers.
inflation rate is high and volatile
investment is more risky and gains from trade are reduced
rapid increase in the supply of money leads to
business or occupation is licensed
the licensing will often be used to limit entry and competitors to the market
what is true
when low income countries adopt institutions and policies supportive of economic freedom, they are able to achieve higher growth rates
if higher tariffs and more restrictive quotas reduce imports to US
US exports would decline bc foreigners would be earning fewer of the dollars needed to purchase goods and services from americans.
if import restrictions prohibit foreigners from selling various goods and services in the US market,
foreigners will have fewer US dollars with which to buy US goods and services
increase in marginal tax rate will
reduce share of additional earnings that induvials are permitted to keep
from viewpoint of entire economy, the cost of gov't
greater than the amount of taxes collected
5th amendment of the bill of rights of US states that
private property shall not be taken except for public use with compensation
which is true
even if gov't programs are implemented with good intentions, they may lead to undesirable outcomes
externalities are examples of market failures bc
they create a conflict between self-interest and the effcienct use of resources
which will = external benefit
old woman plants flower garden in vacant lot next to her house
which of the following is a means by which a business could obtain a monopoly
all of the above
problem that occurs when the public good is provided by private firms
consumers will free ride off of the payments of others bc they have access to the goods even if they dont pay
voters are often uniformed when they cast their ballots bc
they recognize that their vote is unlikely to influence outcome of election
compared to the private sector, the distinguishing characteristic of gov't is its
monopoly on the legitiment use of force on adults
economic theory explains that elected and appointed gov't officials
respond to anticipated costs and benefits to themselves just like business owners
true of federal budget deficit
equal to the excess of federal spending relative to federal revenues during a year
the increased political power of special interest groups and makes counterproductive gov't action more likely
logrolling and pork barrel spending
special interest issues generate substantial personal benefits
for a small minority of voters while small personal costs are imposed on the vast overwhelming number of voters
the political structure that is most consistent with economic growth and progress is
limited gov't, protection of individuals from aggression by others, and decentralized political decision making
if 3/4 of the majority of both houses of the US congress were required for approval of federal spending in excess revenues, the economic analysis indicated that
federal gov't would be less likely to run a budget direct
as baby boomers begin to move towards the retirement phase of life during the years of 2010, spending on social security and medicare will
rise and make it more difficult for the federal gov't to balance its budget
when enterprises get more funds from the gov't subsidies provided by the central planners and less from consumers, they will have an incentive to
spend more time truing to influence politicians and less time trying to reduce costs and please customers
a state has sold its toll roads to a private company. what will be the most likely outcome
toll road system will be run more efficiently and smoothly .
what will reduce the likelihood of poverty
marriage before children
income supplements are large enough to significantly increase the status of poor people will
all of the above
if policy makers want gas to be produced from corn-based ethanol why is it necessary to subsidize it
because it is more costly to produce gas from corn-based ethanol than petroleum
income transfer payments are
transfers of income from taxpayers to recipients who do not provide related services for the payments
comp among decentralized gov't units will
strengthen the incentive of gov't to operate efficiently and cater to the views of citizens
which of the following is true of taxes and subsidies
if you tax something, you get less of it, if u subsidize an activity, you get more of it
when decentralized gov't units operate independently and compete with each other, gov't will attract residents and expand their tax base when
they provide residents with desired serviced at an attractive tax cost.