Reference no: EM131073875
1. A market in which there are neither external benefits nor external costs is:
a. efficient.
b. inefficient.
c. efficient and equitable.
d. impossible.
2) According to the special-interest theory of government, government officials and policymakers:
a. are assumed to maximize the social good.
b. tend to listen to small groups of people who contribute money to their political campaigns.
c. manage resources to maximize efficiency.
d. have a strong incentive to ensure that society's members equally benefit from a project.
3) Scientific research is subsidized by the government because
a. it yields benefits to consumers and producers who did not participate in the research.
b. researchers are under-paid by private firms, so the government must make up the difference.
c. much scientific research takes place at state-funded universities.
d. scientific research has no market value so would not be undertaken without government intervention.
4) The forces of supply and demand will provide a quantity that is
a. less than the efficient quantity if a good generates external benefits.
b. more than the efficient quantity if a good generates external benefits.
c. exactly the efficient quantity if a good generates external benefits.
d. either more than or less than the efficient quantity if a good generates external benefits. It is impossible to know whether it will be too much or too little without more information.
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