Answer to the best of your ability #1) The presence of a monopoly Reduces total
ID: 1125276 • Letter: A
Question
Answer to the best of your ability
#1) The presence of a monopoly
Reduces total output
Reduces total welfare
Redistributes income between producers and consumers
Reduces consumer welfare
All of the above
#2) Stigma is
a) A synonym of shame
b) A form of punishment
c) A public good
d) All of the above
e) None of the above
#3) The central assumption of economics is
Declining marginal utility of income
Rationality of economic agents
More is better
Profit maximization
Cost minimization
#4) A person is judgment-proof if
a) He has immunity from prosecution
b) He is found by the court to be innocent
c) His crime is covered by the Statute of Limitations.
d) He cannot afford to pay the fine
e) He is found guilty but liable for no damages
Questions 5-7 relate to the following diagram.
#5) The optimal and equilibrium levels of output are respectively:
a) 6 and 10
b) 8 and 10
c) 10 and 8
d) 9 and 7
e) None of the above
# 6) The efficiency loss from production at the equilibrium rather than the optimal level of output is given by
a) Area B + Area C
b) Area F + Area E
c) Area D + Area C
d) Area A + Area B
e) None of the above
#7) Imposition of the optimal Pigouvian tax
a) Makes the equilibrium more equitable
b) Generates $32 in tax revenue
c) Increases price by $2
d) Causes the demand curve to shift up by the amount of the tax
e) Increases consumer surplus
#8) In general, raising the standard of proof (the evidence required to convict a wrongdoer) will
Reduce the chance of acquitting an innocent defendant, but increase the chance of convicting a guilty one
Reduce the chance of acquitting a guilty defendant, but increase the chance of convicting an innocent one
Reduce the chance of convicting an innocent defendant, but increase the chance of acquitting a guilty one
Increase the chance of acquitting a guilty defendant and increase the chance of convicting an innocent one
None of the above
#9) According to Marshall’s solution to aggregation, a policy increases economic efficiency if
The sum of willingness to pay for the policy change over those who benefit outweighs the sum of the willingness to pay for the policy change over those who lose
The total (sum) willingness to pay for the policy change for society is positive
The sum of consumer and producer surplus increases
All of the above
None of the above
#10) A written promise of a gift to be delivered in the future
a) Under the doctrine of detrimental reliance is always a legally binding contract
b) Under the doctrine of consideration is never a legally binding contract
c) Under the doctrine of consideration is normally not a legally binding contract
but may be under the doctrine of detrimental reliance
d) Under the doctrine of detrimental reliance is normally a binding contract but
may not be under the doctrine of consideration
e) None of the above
#11) A legal restriction on the maximum rent on an apartment in low income areas
a) Will cause an economic inefficiency if the maximum price is below
the equilibrium price
b) Could hurt the people it is intended to help
c) Could cause a shortage of housing
d) All of the above
e) None of the above
#12) In a situation of dual causality, the legal rule of strict liability with contributory negligence provides
a) The potential accident victim with no incentive to take precautions to avoid the accident
b) The potential accident victim with the incentive to take observable precautions but not unobservable precautions to avoid the accident
c) The potential accident victim with the incentive to take unobservable precautions but not observable precautions to avoid the accident.
d) An accident victim with the right to sue for the damage done
e) B and D
#13) Consider a policy that makes ten people better off by the equivalent of $50 per person and one person worse off by $100. Then this policy constitutes an increase in economic efficiency by
Marshall’s criterion, but not Pareto’s criterion
Pareto’s criterion, but not Marshall’s criterion
Neither Marshall’s criterion nor Pareto’s criterion
Both Marshall’s criterion and Pareto’s criterion
The question does not provide enough information to come to a firm conclusion under either criterion.
#14) According to Gary Becker's theory of crime and punishment, the socially optimal level of crime is
a) That for which social cost of preventing an extra crime equals the social benefit from preventing that extra crime
b) That for which the expected benefit to the criminal from committing a crime equals the expected cost to the criminal from committing a crime
c) Zero
d) That for which the expected fine paid by convicted criminal covers the legal costs of his prosecution
e) None of the above.
#15) The rationale for arguing that some legal rules might favor rich people over poor people relies on each of the following EXCEPT
Marginal utility of income is declining as income increases
Marginal utilities of income across individuals are different
The opportunity cost of time in prison is different across individuals
Rich people have more voting power than poor people
None of the above
#16) Plea bargaining
a) Reduces the expected cost to the criminal of committing a crime
b) Discourages prosecutorial fraud
c) Is consistent with the efficient allocation of prosecutorial resources
d) Is unconstitutional
e) None of the above
#17) If individuals are equally risk averse, then all other things being equal other than income, a fine of $1000 will, in utility terms
Hurt a poor person relatively more than a rich person
Hurt a rich person relatively more than a poor person
Does equal harm to either a rich or a poor person since they both would lose the same amount of income
None of the above
#18) Real property differs from other types of property in that
a) Property rights apply to it
b) Its property rights may be unbundled
c) Its property rights may be bundled
d) It is tangible
e) None of the above
#19) Assuming that no wage salary can be made while in prison and agents are risk neutral with rich people having higher hourly wages than poor people, then a prison sentence of one month will, in dollar terms
Hurt a rich person more than a poor person
Hurt a poor person more than a rich person
Hurt both a rich and a poor person equally
Will hurt no one in dollar terms since no fine is paid
e) None of the above
#20) For a positive externality
The social marginal cost exceeds the private marginal cost
The private marginal cost exceeds the social marginal cost
The social and private marginal benefits are identical
The private marginal benefit exceeds the social marginal benefit
None of the above
#21) Marginal deterrence
a) Refers to deterrence of the marginal crime
b) Is related to the proverb "As well hang from a tree as from the gallows"
c) Is related the proverb "As well hang for a sheep as for a goat"
d) Is related to the proverb "As well hang for a sheep as for a lamb"
e) Would be achieved by executing all criminals
The Roman numerals below refer to questions 22-26
Pecuniary Externality
Rent Seeking Behavior
Negative Externality
Positive Externality
#22) Which of the above is consistent with the rationale used for arguing that competition is not a tortious offense (civil liability)?
I and II
II and III
I and III
I, II, and IV
None of the above
#23) When an action by one agent results in a transfer between two other agents, the result is a
I only
II only
II and III
IV only
I, II, and IV
#24) The presence of a monopoly might actually remedy this.
I and II
II and IV
III only
I, II, and III
None of the above
#25) My property value goes up when you clean your lawn.
I only
II only
III and IV
II and IV
None of the above
#26) Contracting between bee keepers and farmers is evidence of this.
I only
II and IV
IV only
II and IV
None of the above
#27) Coase would most likely agree with each of the following statements EXCEPT:
Externalities do not, in general, lead to inefficiencies
Effluent taxes do not, in general, provide the efficient solution to the problem of pollution
Regulation is necessary in situations where the effects of individual actions are not fully internalized
The problem with externalities is actually transaction costs
e) None of the above
#28) Ex ante punishment related to traffic accidents
a) Refers to punishment after an accident has occurred
b) Refers to punishment for not reporting preocognition of an accident
c) Refers to a tax on driving
d) Refers to punishment not of accidents themselves but of behavior conducive to an increased probability of accident.
e) Refers to punishment from not purchasing auto insurance
#29) Those aligned with the Pigouvian view would most likely agree with which of the following statements regarding pollution:
In general, effluent taxes do not provide the efficient solution to the problem of pollution since damages cannot be perfectly measured
Externalities, in general, lead to inefficiencies
Regulation may be desirable in situations where the effects of individual actions are not fully internalized
All of the above
e) None of the above
#30) Coase argued that Pigou neglected the fact that
a) Externalities exist
b) Transaction costs exist
c) Economic damages are impossible to evaluate
d) Costs resulting from externalities are jointly produced
e) Equilibrium may fail to exist
Explanation / Answer
1. Monopoly reduces output, welfare, redistributes income, reduces consumer welfare.
OPTION E
2. OPTION A
3. OPTION B
4. OPTION D
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.