A. elected officials will act selflessly for the good of society and ignore their own self interest
B. the managers of government agencies are trying to maximize the profit of their agency and they ignore the implications that this has on other departments
C. the optimal level of public goods may be too expensive for the society to produce
D. the measurement of social damages and benefits is difficult and imprecise
Related Mcqs:
- When markets fail to allocate resources efficiently, the ultimate source of the problem is usually ?
A. government regulation
B. that prices are not low enough so firms over produce
C. that prices are not high enough, so people overconsume
D. that property rights have not been well established - We cannot say whether one allocation of resources is better than another allocation because ?
A. some people can’t count
B. some people may not be permanent resident
C. not all economic activity is legal
D. We can’t make value judgments to compare different people’s welfare - An allocation is Pareto-efficient if no reallocation of resources would make some people _______ without making others ________?
A. worse off; worse off
B. better off; better off
C. better off; worse off
D. equal, unequal - The allocation of resources is not efficient if ?
A. the marginal cost of production does not equal society’s marginal benefit
B. the distribution is inequitable
C. economic growth is low
D. unemployment is high - The conclusion that free, unregulated markets will produce an efficient outcome breaks down if ?
A. households do not have perfect information
B. firms are not price takers in input markets
C. firms are not price takers in the output market
D. all of the above - Markets sometimes fail to exist because of________?
A. externalities
B. the free-rider problem
C. a and b
D. a and c - Which of the following government policies would fail to lower the unemployment rate ?
A. Establishing worker training Programs
B. Establishing right-to-work laws
C. Reducing unemployment benefits
D. Establishing employment agencies
E. Raising the minimum wage - Polish economist Oskar Lange’s model of decentralized ______ combined the advantages of market allocation with more uniform income distribution by dividing the returns from social ownership of nonhuman productive resources among the whole population ?
A. market socialism
B. capitalism
C. mixed economy
D. monopoly - Which approach predicts that is an economy operates a full employment and faces trade deficit currency devaluation will improve the trade balance only if domestic spending is cut thus freeing resources to produce exports ?
A. the absorption approaches
B. the Marshall Lerner approach
C. the monetary approach
D. the elasticities approach - If the efficient markets hypothesis is true, then ?
A. shares tend to be overvalued
B. the stock market is informationally efficient so share prices should follow a random walk
C. All of these answers
D. fundamental analysis is a valuable tool for increasing one’s returns from investing in shares
