The maximin criterion can be defined as which of the following?
a. One seeks the maximum of the minimum payoffs to the various available strategies.
b. One seeks the minimum of the maximum losses among the various available
strategies.
c. One seeks the maximum of the minimum losses to the various available strategies.
d. One seeks the maximum of the maximum gains of the various available strategies.
Usury laws are designed to ensure that interest rates in the market do not exceed
acceptable norms.
a. True
b. False
Which of the following affects the marginal physical product of labor?
a. a worker’s abilities and degree of work effort
b. the amount of capital available per worker
c. the technical know-how of the management of the firm
d. all of the above
Individuals and government have been contributors in harming the environment.
a. True
b. False
Economic theory predicts that the price of a depletable resource will rise as it becomes
more scarce.
a. True
b. False
The issue of fairness versus efficiency arises
a. only in a command economy.
b. only in a market economy.
c. in neither a command nor a market economy.
d. in both a command and a market economy.
The shares of GDP taken in taxes by federal, state & local governments
a. have risen steadily in the past 40 years to about 22 percent.
b. have dropped steadily in the past 40 years to about 6 or 7 percent.
c. grew substantially until the early 1970s and have leveled off at about 10 to 11
percent.
d. fell steadily until the early 1970s and has risen steadily since then.
The price elasticity of a horizontal demand curve is always
a. infinitely large.
b. zero.
c. one.
d. increasing as price increases.
Public goods could effectively be provided by private markets, but we choose to
provide them through government.
a. True
b. False
Market power allows firms to raise prices significantly above the competitive level.
a. True
b. False
“Demand” is a series of quantities demanded, one for each person in the market.
a. True
b. False
An increase in supply will have what effect on equilibrium price and quantity?
a. Price will increase; quantity will decrease.
b. Price will decrease; quantity will increase.
c. Both price and quantity will increase.
d. Both price and quantity will decrease.
While specialization and exchange were very important to Adam Smith in 1776, they
have largely lost their importance in the 21st century.
a. True
b. False
A true public good is characterized by
a. depletability but not excludability.
b. excludability but not depletability.
c. both depletability and excludability.
d. neither depletability nor excludability.
Is the call for protection on the basis of “infant industry” valid?
a. No, because protection has no place in industrial development.
b. No, protection is always improper.
c. Uncertain, economic theory has no answer to this question.
d. Yes, although it can be overstated and abused.
The working population of the United States is approximately
a. 144 million
b. 290 million
c. 300 million
d. 1.3 billion