Advanced Microeconomics
Pre-Test Questions
Course Introduction
Advanced Microeconomics delves into the foundational theories and mathematical frameworks underpinning individual decision-making, market mechanisms, and strategic interactions among rational agents. The course covers topics such as consumer and producer theory, general equilibrium, game theory, mechanism design, and information economics. Emphasizing both abstract modeling and real-world applications, students will develop analytical skills to interpret market outcomes, assess policy implications, and understand the limitations of economic models in the presence of market failures or information asymmetries.
Recommended Textbook
Microeconomics An Intuitive Approach with Calculus 2nd Edition by Thomas Nechyba
Available Study Resources on Quizplus
29 Chapters
713 Verified Questions
713 Flashcards
Source URL: https://quizplus.com/study-set/2474
Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
12 Verified Questions
12 Flashcards
Source URL: https://quizplus.com/quiz/49122
Sample Questions
Q1) A spontaneous order emerges from individual decisions that cause something to "work" without anyone planning for it to "work".
A)True
B)False
Answer: True
Q2) When economists say that policy A is more efficient than policy B, they mean policy A is better than policy B.
A)True
B)False
Answer: False
Q3) One of the aims of positive economics is to rank policies under consideration from most desirable to least desirable.
A)True
B)False
Answer: False
Q4) In order to predict behavior, economic models must be realistic.
A)True
B)False Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: A Consumers Economic Circumstances
Available Study Resources on Quizplus for this Chatper
26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/49123
Sample Questions
Q1) In a graph of choice sets, a price change causes the slope of budget lines to change.
A)True
B)False
Answer: True
Q2) When the good on the horizontal axis is a composite good, the slope of the budget constraint is minus the price of the good on the vertical axis.
A)True
B)False
Answer: False
Q3) Suppose that the price of a TV is $200 and he price of an MP3 player is $50.What is the opportunity cost of a TV (in terms of MP3 players), and what is the opportunity cost of an MP3 player (in terms of TVs)?
Answer: The opportunity cost of a TV is 4 MP3 players, and the opportunity cost of an MP3 player is one fourth of a TV.
Q4) The budget line on a graph represents choices which exhaust all resources.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Economic Circumstances in Labor and Financial Markets
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/49124
Sample Questions
Q1) The opportunity cost of current consumption differs for borrowers and savers only if the interest rate for savers differs from the interest rate for borrowers.
A)True
B)False
Answer: True
Q2) An increase in the interest rate is an increase in the opportunity cost of consuming in the future.
A)True
B)False
Answer: False
Q3) Since interest rates for borrowing are usually higher than interest rates for savings, the intertemporal budget constraint has an inward kink for individuals that earn income now and in the future.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Tastes and Indifference Curves
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/49125
Sample Questions
Q1) The number of units of the good on the horizontal axis that we are willing to give up to get one more unit of the good on the vertical axis is equal to the absolute value of the slope of the indifference curve.
A)True
B)False
Q2) Explain the following statement: Individuals with different tastes might have the same tastes at the margin at their current consumption bundles.
Q3) Suppose bundle A is better than bundle B for a consumer, and bundle C is an average of bundles A and B.
a.Use the continuity, convexity and monotonicity assumptions to formally prove that this implies that bundle C is better than bundle B.
b.Did you also -- implicitly or explicitly -- use the rationality axioms?
Q4) You like bundle A better than bundle B, and bundle C is an average between A and
B.If your tastes satisfy convexity, then C is at least as good as A and as B.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Different Types of Tastes
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/49126
Sample Questions
Q1) Homothetic tastes are always tastes over essential goods.
A)True
B)False
Q2) If tastes are Cobb-Douglas, they can be represented by a utility function that is homogeneous of degree k where k can take on any positive value.
A)True
B)False
Q3) Suppose you are very picky about your outdoor BBQ experiences --- and you need exactly 1 cup of lighter fluid for each bag of charcoal you use.If you have either leftover charcoal or leftover lighter fluid, you simply discard it.
a.With cups of lighter fluid on the horizontal and bags of charcoal on the vertical axis, illustrate some of your indifference curves.
b.Suppose that your favorite charcoal has just gotten better because the producer has infused the charcoal with half a cup of lighter fluid per bag.How does your answer to (a) change?
c.How could you change the units in which lighter fluid is measured on the horizontal axis to get your graph from (b) to look the same as you original graph in (a)?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Doing the Best We Can
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/49127
Sample Questions
Q1) Which of the following is correct about a consumer's optimization problem:
A)In order for a consumer to not be optimizing at a corner solution, it is necessary for us to assume that all goods are essential.
B)In order for a consumer to not be optimizing at a corner solution, it is sufficient for us to assume that all goods are essential.
C)In order for a consumer to not be optimizing at a corner solution, it is necessary and sufficient for us to assume that all goods are essential.
D)None of the above.
Q2) Essential goods give rise to corner solutions.
A)True
B)False
Q3) Explain how we can estimate the shape of a person's indifference map by observing choices under different economic circumstances.Explain also why we will not be able to identify any non-convexities in tastes from our observations.
Q4) Suppose that choice sets are convex.State assumptions about tastes that are necessary and sufficient to guarantee that the first order conditions are necessary and sufficient for identifying a true optimum.
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Income and Substitution Effects in Consumer
Goods Markets
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/49128
Sample Questions
Q1) Every Giffen good is a necessity but not every interior good is a necessity.
A)True
B)False
Q2) At most museums, you can either buy a year-long membership that gives you free access to the museum any time, or you can pay a daily fee every time you visit.(Assume for purposes of this exercise that everyone can in principle afford the year-long membership.)
A)Those who choose to pay the daily fees all place the same value on their marginal museum visit.
B)We cannot tell how much value anyone places on the marginal museum visit because we cannot compare utility across individuals.
C)If someone is indifferent between the two options, she will go to the museum at least as much if she chooses the year-long membership than if she does not.
D)Both (a) and (c) are true.
E)Both (b) and (c) are true.
Q3) Every necessity is a normal good, but not all normal goods are necessities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Wealth and Substitution Effects in Labor and Capital Markets
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/49129
Sample Questions
Q1) As long as both current and future consumption are normal goods, a decrease in the interest rate will result in a drop in savings.
A)True
B)False
Q2) The more substitutable current consumption is with future consumption, the more likely it is that an increase in the interest rate will cause an increase in savings.
A)True
B)False
Q3) Assuming no kinks in indifference curves and assuming our usual assumptions about tastes hold, someone who currently neither saves nor borrows will begin to borrow when the interest rate falls.
A)True
B)False
Q4) The amount of work a person will do as wage increases depends entirely on the size of the wealth effect.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Demand for Goods and Supply of Labor and Capital
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/49130
Sample Questions
Q1) Holding all prices fixed, income-demand curves relate changes in exogenous income to changes in the quantity of a good demanded.
A)True
B)False
Q2) For the same sized substitution effect, own-price demand curves for inferior goods are steeper than own price demand curves for normal goods.
A)True
B)False
Q3) Suppose your tastes over consumption and leisure have constant elasticity of substitution.I observe that, when your wage went up, you continued to work the same number of hours.From this, I can conclude that you have Cobb-Douglas tastes. A)True
B)False
Q4) An increase in the price of good 2 will cause the demand curve for good 1 to shift out. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Consumer Surplus and Deadweight Loss
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/49131
Sample Questions
Q1) If tastes are homothetic, there exists a utility function (that represents those tastes) such that the indirect utility function is homogeneous of degree 1 in income.
A)True
B)False
Q2) If a person's compensated demand (or MWTP) curve is perfectly vertical, the good is borderline between regular inferior and Giffen for this consumer.
A)True
B)False
Q3) Suppose x is an inferior good.Then we will overestimate the deadweight loss from taxes on consumption good x if we use the uncompensated demand curve rather than the marginal willingness to pay (or compensated demand) curve.
A)True
B)False
Q4) When a taxed good is normal, using the (uncompensated) demand curve to estimate deadweight loss will over-state the actual deadweight loss.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: One Input and One Output: a Short-Run
Producer Model
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/49132
Sample Questions
Q1) Price taking producers make zero economic profit when price falls
A)at the lowest point of the average cost curve
B)at the point where marginal cost crosses average cost
C)at the lowest point of the marginal cost curve
D)both (a) and (b)
E)both (a) and C
F)both (b) and (c)
G)All of the above
H)None of the above
Q2) The output level is constant along any isoprofit line.
A)True
B)False
Q3) Price-taking producers have horizontal marginal revenue curves.
A)True
B)False
Q4) In the one-input model, a decrease in output price will always cause labor demand to shift in.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Production With Multiple Inputs
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/49133
Sample Questions
Q1) An increasing returns to scale production function could be quasiconcave.
A)True
B)False
Q2) Suppose capital and labor are perfect complements in production.For output levels between 0 and 100, 2 units of labor together with 1 unit of capital produce 1 unit of output; for output levels between 100 and 200, 1 unit of labor together with 1 unit of capital produces 1 unit of output; and for output levels above 200, 1 unit of labor together with two units of capital produces one additional output.In each graph below, carefully label as much of each graph as you can.
a.On a graph with labor on the horizontal axis and capital on the vertical, illustrate isoquants for 100, 200 and 300 units of output.
b.Is this production technology homothetic?
c.Suppose the wage and rental rates are 10.On a graph with output on the horizontal axis and dollars on the vertical, plot the total (long run) cost of producing 100, 200 and 300 units of output and illustrate the total cost curve.
d.On a separate graph with output on the horizontal and dollars on the vertical axis, illustrate the (long run) marginal cost curve and the approximate shape of the long run average cost curve.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Production Decisions in the Short and Long Run
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/49134
Sample Questions
Q1) Output supply is more responsive to price in the short run than in the long run.
A)True
B)False
Q2) Short run average expenditure curves are tangent at their lowest point to the long run average cost curve.
A)True
B)False
Q3) (Long run) average cost curves are U-shaped when the production technology has increasing returns to scale and the firm faces recurring fixed costs.
A)True
B)False
Q4) Short run economic costs must be lower than long run economic costs because long run economic costs include the cost of inputs that are fixed in the short run (and thus are not part of short run cost).
A)True
B)False
Q5) The cross-price demand for capital (relative to the wage) may slope up or down. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Competitive Market Equilibrium
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/49135
Sample Questions
Q1) An increase in license fees -- a long run recurring fixed cost -- will lead to a drop in the number of firms competing in a competitive industry.
A)True
B)False
Q2) If all firms are identical, output demand shifts cannot cause changes in output price in the long run.
A)True B)False
Q3) A drop in output demand accompanied by a simultaneous drop in output supply will cause the output price to fall.
A)True
B)False
Q4) The long run market supply curve is formed by adding up individual firm supply curves in the industry.
A)True B)False
Q5) Equilibrium prices coordinate the actions of producers and consumers. A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: The Invisible Hand and the First Welfare
Theorem
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/49136
Sample Questions
Q1) The First Welfare Theorem states that, invariably, a competitive market results in an efficient allocation of resources and thus maximizes social surplus.
A)True
B)False
Q2) A "social planner" is a fictional societal planner who would always choose the same outcome as the competitive market.
A)True
B)False
Q3) Absent any violations of the conditions underlying the first welfare theorem, the competitive market equilibrium is efficient if and only if tastes are quasilinear.
A)True
B)False
Q4) Absent any violations of the first welfare theorem, the competitive equilibrium is efficient.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: General Equilibrium
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/49137
Sample Questions
Q1) Consider an Edgeworth Box economy with two individuals and two goods and suppose that the tastes of both individuals are quasilinear in good 1.
a.Suppose initially that individual 1 has relatively little endowment of both good but the competitive equilibrium allocation has him consuming some of each.Illustrate such a competitive equilibrium.
b.Now suppose the government is able to redistribute the endowment in this economy (prior to any trade occurring).In order to achieve a more equitable outcome, the government redistributes some of good 1 from individual 2 to individual 1.Show such a redistribution in your Edgeworth Box.
c.Assume that both individuals continue to consume at an interior solution in the new equilibrium.How will the two individuals' consumption of good 1 change from what it would have been without the redistribution?
d.Would your answer to (c) differ in any way if the government had instead redistributed good 2 from individual 2 to individual 1?
e.How would a sufficiently large redistribution alter your answer?
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Choice and Markets in the Presence of Risk
Available Study Resources on Quizplus for this Chatper
26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/49138
Sample Questions
Q1) If the probability of the bad outcome is 0.5, the benefit level of actuarily fair insurance will be half the premium.
A)True
B)False
Q2) Expected utility theory assumes that individuals have utility functions over a composite consumption good.
A)True
B)False
Q3) The certainty equivalent is less than the expected value of a gamble when tastes are risk averse.
A)True
B)False
Q4) The risk premium is negative when tastes are risk averse.
A)True
B)False
Q5) Suppose an individual has state-independent tastes and invests in risky stocks rather than safe bonds.We can infer that he must be risk loving.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Elasticities, Price-Distorting Policies, and Non-Price Rationing
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/49139
Sample Questions
Q1) Unless goods are Giffen goods, own-price elasticities of demand are always negative.
A)True
B)False
Q2) When leisure is a normal good, the wage elasticity of labor supply is always positive.
A)True
B)False
Q3) Price ceilings have to be set above the undistorted market equilibrium price in order to have any impact.
A)True
B)False
Q4) The concept of "non-price rationing" means that, in general, we can deal with scarcity just as well without prices as with prices.
A)True
B)False
Q5) The wage elasticity of labor demand is always negative. A)True
B)False
20
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Distortionary Taxes and Subsidies
Available Study Resources on Quizplus for this Chatper
32 Verified Questions
32 Flashcards
Source URL: https://quizplus.com/quiz/49140
Sample Questions
Q1) If either the supply or the demand curve in a goods market is very elastic, a per-unit tax will end up not raising very much revenue.
A)True
B)False
Q2) Suppose tastes for consumption now and consumption in the future have constant elasticity of substitution.It may then be the case that a tax on interest income is efficient even if savings (defined as current income not consumed) fall in response to the tax.
A)True
B)False
Q3) To identify the burden of a per-unit tax on consumers, we have to use the aggregate marginal willingness to pay curve whenever the underlying good is not quasilinear.
A)True
B)False
Q4) The statutory incidence of a tax is the same as the economic incidence of a tax whenever a tax is levied on a side of a market that is perfectly price-inelastic.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 20: Prices and Distortions Across Markets
Available Study Resources on Quizplus for this Chatper
22 Verified Questions
22 Flashcards
Source URL: https://quizplus.com/quiz/49141
Sample Questions
Q1) Because trade across markets creates winners and losers,the overall surplus in the loser's market is diminished.
A)True
B)False
Q2) Regardless of what types of workers are available in different countries, unrestricted labor outsourcing always results in an equalization of wages across countries.
A)True
B)False
Q3) Explain the impact of speculators on markets is similar and how it may be different from the impact of exporters and importers.
Q4) The larger a country is relative to the rest of the world, the less likely it is to be able to produce a net benefit for its citizens by imposing an import tariff.
A)True
B)False
Q5) When tariffs on imports are eliminated, everyone benefits.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 22
Chapter 21: Externalities in Competitive Markets
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/49142
Sample Questions
Q1) Transaction costs are the costs incurred by individuals dealing with one another.
A)True
B)False
Q2) In order for a cap-and-trade system to work, it must be that pollution permits are bought by producing firms -- and not given to them as part of an attempt to prevent them to lobby against the cap-and-trade system
A)True
B)False
Q3) The Coase Theorem implies that the reason people sue each other in court is that property rights have not been sufficiently well specified.
A)True
B)False
Q4) In order for a Pigouvian tax to be efficient, the amount of revenue raised plus the economic value of the reduction in pollution must together be larger than the loss in consumer and producer surplus.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Asymmetric Information in Competitive Markets
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/49143
Sample Questions
Q1) Whenever there is adverse selection without signaling or screening, there will be a missing market.
A)True
B)False
Q2) Consider two types of rules that might govern an otherwise unregulated health insurance market: (1) Insurance companies can price-discriminate against the sick and old; (2) insurance companies cannot price discriminate against the sick and old.Explain why, in equilibrium, insurance may be very expensive for the sick and old regardless of which case we find ourselves in.
Q3) In the presence of adverse selection (due to high and low cost consumers), firms will employ screens to get information about consumers so long as this leads to a more efficient competitive equilibrium.
A)True
B)False
Q4) Explain the following statement: "In health insurance markets, moral hazard implies individuals will consume too much health care, whereas adverse selection implies too little health care will be consumed."
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Monopoly
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/49144
Sample Questions
Q1) Monopoly power can last only if there are legal barriers to entry for other firms.
A)True
B)False
Q2) In the presence of positive production externalities, a monopolist might produce the efficient output level.
A)True
B)False
Q3) Consumers prefer inefficient third degree price discrimination to efficient first degree price discrimination.
A)True
B)False
Q4) Depending on the shape of the marginal cost curve, a monopolist might produce an output level on the elastic or the inelastic part of demand.
A)True
B)False
Q5) What are some obstacles to price discrimination that a monopolist who is protected by high barriers to entry might face?
To view all questions and flashcards with answers, click on the resource link above.
Page 25
Chapter 24: Strategic Thinking and Game Theory
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/49145
Sample Questions
Q1) In simultaneous move Bayesian games, a player's beliefs are fully given by the probability distribution used by "Nature" to assign types.
A)True
B)False
Q2) If all players in a game have a dominant strategy, then there can only be one pure strategy Nash equilibrium to the game.
A)True
B)False
Q3) Suppose a player can play 2 possible actions and has 5 possible decision nodes in a sequential game.Then he has 10 possible strategies he can play.
A)True
B)False
Q4) Suppose a player in a sequential game has 5 potential decision nodes, with 2 possible actions at each node.Then he has 25 possible pure strategies.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Oligopoly
Available Study Resources on Quizplus for this Chatper
22 Verified Questions
22 Flashcards
Source URL: https://quizplus.com/quiz/49146
Sample Questions
Q1) Suppose a market is currently served by an incumbent firm.If a potential entrant can enter prior to the incumbent firm announcing its output (or price), the incumbent cannot deter entry through its actions.
A)True
B)False
Q2) Suppose a market is currently served by an incumbent firm.If a potential entrant can enter prior to the incumbent firm announcing its output (or price), the entrant will enter the market and force the incumbent to compete.
A)True
B)False
Q3) If two simultaneous move Bertrand price competitors have different constant marginal costs, then any price between their marginal costs could be a Nash equilibrium price.
A)True
B)False
Q4) Recurring fixed costs may lead to only one firm producing in a Cournot oligopoly model.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 27
Chapter 26: Product Differentiation and Innovation in Markets
Available Study Resources on Quizplus for this Chatper
16 Verified Questions
16 Flashcards
Source URL: https://quizplus.com/quiz/49147
Sample Questions
Q1) Since firms within a monopolistically competitive industry set output where marginal revenue is equal to marginal cost, the size of the fixed entry cost does not impact the equilibrium price.
A)True
B)False
Q2) Since firms outside an industry cannot have an incentive to enter the industry in equilibrium, firms inside a monopolistically competitive equilibrium must be making zero profit.
A)True
B)False
Q3) Without price competition, there is no incentive for product differentiation.
A)True
B)False
Q4) Most firms produce where marginal revenue is equal to marginal cost, but firms in a monopolistically competitive industry instead choose output where average cost is equal to demand.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 28
Chapter 27: Public Goods
Available Study Resources on Quizplus for this Chatper
21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/49148
Sample Questions
Q1) Consider a game where individuals are asked to contribute to a public good.Then consider the best response function for individual i, with individual i's contribution measured on the vertical axis and "the average contribution by everyone else" on the horizontal.Then as the number of individuals increases, i's best response function shifts in.
A)True
B)False
Q2) Our free-rider model of voluntary giving suggests that, when the government subsidizes private giving to charity, it's contribution will simply "crowd out" the private contributions so long as no one is at a corner solution.
A)True
B)False
Q3) Tiebout local public good provision is more easily implemented than a Lindahl equilibrium -- because people know each other's tastes locally and can more easily come up with the right way to divide the cost for public goods.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 28: Governments and Politics
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/49149
Sample Questions
Q1) In an election in which there is no policy which can defeat all other policies, the sequence of the votes determines the outcome, even under majority rule.
A)True
B)False
Q2) Suppose voter preferences over a public good funded through a head tax are single peaked.If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.
A)True
B)False
Q3) If a coalition D is decisive over a pair of social outcomes (x,y) under a social choice process that satisfies Arrow's axioms, then another coalition C (that differs from D) cannot be decisive over a different pair (a,b) of social outcomes.
A)True
B)False
Q4) Discuss how a politicians "policy differentiation" from his opponent in an election softens the competition over how much in political rents the politician will be able to collect.
To view all questions and flashcards with answers, click on the resource link above. Page 30
Chapter 29: What Is Good Challenges From Psychology and Philosophy
Available Study Resources on Quizplus for this Chatper
23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/49150
Sample Questions
Q1) When a self-aware, present-biased individual invests in a commitment device that will bind him in the future, he will resent that commitment device when the future becomes the present.
A)True
B)False
Q2) Comment on the following: "Present-biased people are impatient, but impatient people don't necessarily have to be present-biased."
Q3) Of all the constant elasticity of substitution social welfare function, only the one with elasticity of infinity will always choose the efficient outcome from a second-best consumption possibility frontier.
A)True
B)False
Q4) Positive economics does not require us to believe that actual happiness is the same as utility as modeled in economic theory.
A)True
B)False
Q5) What's the Easterlin Paradox -- and in what sense does it suggest reference-dependent preferences?
To view all questions and flashcards with answers, click on the resource link above.