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T/F: One of the criticisms of the kinked demand curve is that it never explains how the original price was determined.
T/F: The population that would be most impacted by a change in minimum wage would be the agricultural field workers
T/F: According to the least cost rule, the last dollar spent on each resource yields the same marginal product.
T/F: Poorer countries are willing to sacrifice the environment in order to put their resources into getting out of poverty.
The U.S. Steel Antitrust case was important because it was determined that just because there was only one firm in an industry, it was not necessarily illegal.
T/F: The adverse selection problem is the tendency for workers to shirk when they are not being monitored.
T/F: Voters have the tendency to vote for their own self interests, which works to the benefit of the economy due to the invisible hand theory.
T/F: According to the text a moral hazard occurs when a newly insured party behaves differently (more recklessly) after an insurance policy is issued.
MC: Which of the following is NOT a basic characteristic of monopolistic competition?
T/F: Compared to most other countries, the U.S. has relatively high taxes on general consumption
T/F: Since the world's population increased from 1 to 6.8 Billion, the standard of living has steadily decreased.
T/F: Although state and local taxes are highly progressive, Federal taxation is predominantly regressive.
MC: In response to the financial crisis that began in 2007, the government began to bail out banks deemed "too big to fail." Critics of this action argued that this would create the prospect of future bailouts and encourage banks to be fiscally irresponsible in the future. This illustrates:
the moral hazard problem
T/F: Adverse Selection occurs when one party makes a decision that ends up being poor to unfoerseen natural disasters (hurricane, flood, etc...)
T/F: Even if a majority of the population wants a law and the law is passed, the outcome may still be economically inefficient
T/F: Modernizing economies that have declining birthrates may still experience population growth because of rapidly declining death rates.
MC: A natural monopoly occurs when:
long-run average costs decline continuously through the range of demand.
T/F: A player is said to have a dominant strategy when one of the options is superior, regardless of what strategy the other player chooses.
T/F: Sales taxes are proportional in relation to income because the same tax rate applies regardless of the size of a purchase.
MC: Under monopolistic competition entry to the industry is:
more difficult than under pure competition but not nearly as difficult as under pure monopoly.
T/F: In a zero-sum game, the gains by one player will be exactly offset by the losses of the other.
T/F: Sales taxes on consumer goods are regressive because poor people consume a larger proportion of their incomes than do rich people.
T/F: Corruption does not have the same impact on private business as it does on the government.
T/F: Professor Hill agreed to cancel the final examination if students promised to study for it anyway. The concept of moral hazard would predict that it is unlikely that students will study for the exam.
T/F: Economists blame over regulation for the collapse of the Atlantic tuna and Red hake fish populations.
MC: Nonprice competition refers to:
advertising, product promotion, and changes in the real or perceived characteristics of a product.
T/F: The agriculture industry is in decline because the supply has increased rapidly while the demand has increased slowly.
T/F: The average US household income in 2008 was among the highest in the world at just above $68,000.
T/F: One of the causes of income inequality is difference in the levels education and training among employees.
T/F: The U.S. averages about 4 times as many illegal immigrants as there are legal immigrants.
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