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Unformatted text preview: 1. Vilfred Pareto argued that we have an increase in efficiency if, through a change in public policy or in the law: a) some members of society are better off, and no member of society is worse off. b) the sum of utilities derived by members of society is increased. c) dollar benefits to winners exceed dollar costs to losers from the change. d) the poor are made better off, even though the rich may be worse off. 2. Alfred Marshall argued that we have an increase in efficiency if through a change in public policy or in the law: a) some members of society are better off, and no member of society is worse off. b) the sum of utilities derived by members of society is increased. c) dollar benefits to winners exceed dollar costs to losers from the change. d) the poor are made better off, even though the rich may be worse off. 3. Considering the history of environmental legislation in the United States we can conclude that clean air and water is an example of a _______ good. a) normal b) necessary c) superior d) luxury 4. Nike pays a typical worker in one of its Vietnamese factories – labeled “sweatshops” by critics - ___________ dollars per year. This sum is approximately twice the average Vietnamese worker’s annual income. a) $300 b) $600 c) $1,200 d) $2,400 5. The “Hawk/Dove” game, useful in explaining strategies adopted by bullies on the playground or building a “Doomsday Machine” (a central feature of the movie Doctor Strangelove ), can also be applied to explain events in markets where we have: a) external costs b) prisoner’s dilemma c) public goods d) bilateral monopoly 6. The argument that the legalization of abortion is a primary factor in the explanation of the decrease in crime in the 1990s is an example of: a) normative economic analysis. c) positive economic analysis. b) counterfactual economic analysis. d) immoral economic analysis. 7. David Friedman puts his house up for sale. In face of increased competition, his neighbor is forced to sell his house for $5,000 less than he would have been able to get. This is an example of a __________. a) negative externality b) pecuniary externality c) positive externality d) None of the above. 8. Indians living on reservations in the United States live in trailers rather than houses. The black rhinoceros is nearly extinct. Both of these outcomes can be explained by the: a) absence of private property rights c) presence of negative externalities b) excessive government regulation d) All of the above are correct 9. The quality of American public education has steadily declined over the past four decades, especially in the areas of mathematics and science. This is a disturbing trend in a world in which we need better educated men and women to compete in a global marketplace. Wheelen argues that the problem is one of _____________ problems in the market for teachers....
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- Spring '09
- Inflation, legal standard, Mr. A, decrease, inefficient outcome