Why is it rational for individuals to be ignorant about public goods but not about private goods?
What will be an ideal response?
Ques. 2The table above shows the amounts of cloth and cheese that China and Pakistan can produce in an hour. Which country has the comparative advantage in cloth and which country has the comparative advantage in cheese?
What will be an ideal response?
Ques. 3If a college wanted to increase its revenues from tuition payments, should it increase the tuition of day and evening students alike?
What will be an ideal response?
Ques. 4In the figure above, if an excise tax is imposed that generates an efficient allocation of resources, then the amount of output will be
A) zero.
B) 50 units.
C) 150 units.
D) 250 units.
Ques. 5Which of the following may yield economies of team production for Jitters Coffee Company, Inc?
A) dividing the process of packaging and shipping coffee into several specialized tasks, each performed by different people
B) expanding into a larger coffee packaging plant
C) expanding into the packaging and sale of tea and powdered chocolate
D) all of the above
Ques. 6Because skills are costly to obtain, at a given wage rate, the
A) quantity demanded of high-skilled labor is less than the quantity demanded of low-skilled labor.
B) quantity demanded of high-skilled labor is greater than the quantity demanded of low-skilled labor.
C) quantity supplied of high-skilled labor is less than the quantity supplied of low-skilled labor.
D) quantity supplied of high-skilled labor is greater than the quantity supplier of low-skilled labor.
Ques. 7The FOMC is the agency that insures deposits up to 250,000.
Indicate whether the statement is true or false
Ques. 8Ashton has the utility of wealth curve shown in the above figure. He owns a sports car worth 30,000, and that is his only wealth. Ashton is a careless driver and there is a 30 percent chance that he will have an accident within a year.
If he does have an accident, his car is worthless. What is Ashton's expected utility? A) 100
B) 30
C) 70
D) zero
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