econ part 3

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

inflation

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.