In which of the following countries would an increase in per capita income likely result in the most improvement to health status of the population? (2006 per capita incomes in PPP dollars shown in parentheses.)
a. Mexico (13,383)
b. New Zealand (26,068)
c. Germany (32,900)
d. United Kingdom (34,084)
e. United States (44,639)
QUESTION 2Accelerated depreciation laws may increase firms' investment in equipment because:
a. machines will wear out more rapidly.
b. profits will be increased.
c. the rental rate on capital will be reduced.
d. the price of machines will fall.
QUESTION 3In a principal-agent relationship
a. the principal wants the agent to act on her behalf
b. the principal wants the agent to act on her behalf
c. the principal wants the agent to act on the behalf of others
d. the agent wants the principal to act on the behalf of others
QUESTION 4Inoculation programs against certain diseases such as small pox, polio, and whooping cough create
a. public goods.
b. positive externalities in consumption.
c. nonrival goods.
d. nonexcludable goods.
e. external costs to society equal to the costs of the program.
QUESTION 5Under competitive conditions, the relative price of a finite resource would be expected to:
a. rise at an increasing rate.
b. rise at a rate equal to the real interest rate.
c. rise at a rate equal to the nominal interest rate.
d. rise at a rate determined by demand conditions.
QUESTION 6Which is NOT an example of signaling high quality in a social setting
a. wearing a business suit on a job interview
b. leaving a big tip for the waiter after a dinner date
c. offering an expensive engagement ring to your bride
d. Doing messy chores before a big date
QUESTION 7The optimal level of output may be defined as that level of output where
a. average benefit exceeds average cost by the greatest amount.
b. total benefit equals total cost.
c. marginal benefit exceeds marginal cost by the greatest amount.
d. the marginal benefit of the last unit purchased equals its marginal cost.
e. it is impossible to define optimal in any meaningful way.
QUESTION 8The present value of 1 payable in the future decreases:
a. the higher r is and the sooner it is to be paid.
b. the lower r is and the sooner it is to be paid.
c. the higher r is and the longer time until it is paid.
d. the lower r is and the longer time until it is paid.
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