Midterm Exam Multiple Choice
The following is an example of what?
Spending time with a lonely grandparent.
What principle or justice has been ignored in the following scenario:
Your next door neighbors call the police at 12:01 AM, the moment the noise ordinance comes into effect, because your party is noisy. You have always been cooperative in the past.
The following is an example of which justice?
Alcoholics Anonymous meets with the goal of achieving sobriety in its members.
Comparative and Absolute advantage:
Assume Crusoe and Friday wish to maximize their production.
1 Coconut 1 Fish
Crusoe 30 min 25 min
Friday 20 min 20 min
Who has the absolute advantage?
Comparative and Absolute advantage:
Assume Crusoe and Friday wish to maximize their production.
1 Coconut 1 Fish
Crusoe 30 min 25 min
Friday 20 min 20 min
Considering comparative advantage, who would produce what?
Product: Electricity
A subsidy is given to the producers of electricity What are the effects?
Product: Education
Consider the elasticity of demand for education by parents for their children. Assume education firms (schools) can easily enter the market and there is not a big increase in the price of inputs.
A voucher (subsidy) is given to the consumers of education. What are the effects?