1a) In response to the threat of budget cuts, the Connecticut State Department o

Question

1a) In response to the threat of budget cuts, the Connecticut State Department of Recreation proposed shutting down many parks and beaches. This is an example of:

a. Cost efficient in bureaus

b. Budget maximizing by bureaus

c. The median-voter model

d. Logrolling

e. Direct democracy

1b) When multi-product firm like GE spreads its outlays for research, development, and marketing over different products, per-unit costs decrease. This implies that Ge is taking advantage of:

a. Government intervention

b. Vertical integration

c. Economies of scale

d. Economies of scope

e. Market power

1c) According to the US Census Bureau, ____:

a. A greater percentage of families are below the poverty level ow than in 1960

b. A smaller percentage of families are below the poverty level now than in 1960

c. The same percentage of families are below the poverty level now as in 1960

d. The percentage of families below the poverty level was the lowest in 2007-2009

e. 30 percent of families were below the poverty level in 2013

1d) The supply of loanable funds come, in part, from ____:

a. Consumer saving

b. Business investment

c. The federal government

d. Current consumption

e. Future consumption

1e) According to Stigler’s search model, we should expect greater price dispersion for a given period:

a. If the good is a luxury

b. If the good is inferior

c. If there is a lot of common knowledge about the good

d. During a recession

e. If a computerized search service is offered

1f) The statement “if doesn’t hurt to get more information” holds true:

a. Especially when the opportunity cost of acquiring the information is high

b. When information is less than perfect

c. Only if the marginal benefit of information is greater than the marginal cost of information

d. Only if the marginal benefit of information is equal to the marginal cost of information

e. Only if the marginal benefit of information is less than the marginal cost of information

Explanation / Answer

1a)In response to the threat of budget cuts, the Connecticut State Department of Recreation proposed shutting down many parks and beaches. This is an example of: b. Budget maximizing by bureaus {bureaucrats obtain the budget they want by lowering prices to consumers raising prices to consumers promising to produce more efficiently threatening legislatures with an all­or­nothing choice allowing legislators to cut particular items from their budget}

1b) When multi-product firm like GE spreads its outlays for research, development, and marketing over different products, per-unit costs decrease. This implies that Ge is taking advantage  c) 'Economies Of Scale { Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because of the inverse relationship between the quantity produced and per-unit fixed costs; i.e. the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are spread out over a larger number of goods. Economies of scale may also reduce variable costs per unit because of operational efficiencies and synergies}

1c) According to the US Census Bureau : e. 30 percent of families were below the poverty level in 2013

1d) The supply of loanable funds come, in part, from  b. Business investment   {The bulk of demand for loanable funds comes from business firms which borrow money for purchasing or making new capital goods, including the building up of inventories (i.e. stocks of goods). Demand for loanable funds for investment purposes by business firms is the most important constituent of total demand for loanable funds.}

1e) According to Stigler’s search model, we should expect greater price dispersion for a given period

b. If the good is inferior

1f) The statement “if doesn’t hurt to get more information” holds true:e Only if the marginal benefit of information is less than the marginal cost of information

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