ECON 111

A chemical bathroom cleaner has an ingredient X that allows the cleaner to lather well and remove stains. The cost of producing a bottle of this bathroom cleaner is $3.60, but the bottle retails for $5.50. When consumers use the bathroom cleaner, the lather that gets washed down the drain escapes into the environment and releases allergens that cause respiratory problems for people. What is the social cost of a bottle of this cleaner? a. $5.50 plus the external cost of such a bottle of bathroom cleaner b. $5.50 less the external cost of such a bottle of bathroom cleaner c. $3.60 d. the cost paid by other people as a result of the use of such a bottle of bathroom cleaner

a. $5.50 plus the external cost of such a bottle of bathroom cleaner

(Table: Costs of Antibiotics) Refer to the table. The market equilibrium quantity is ________ and the efficient equilibrium quantity is ________. a. 3; 2 b. 2; 5 c. 3; 4 d. 5; 1

a. 3; 2

(Figure: Kidney Trade Ban Policy Spectrum) Refer to the figure. If there are only two candidates, A and B, and an open market for kidney trading is the only issue being debated in this election, which candidate will win the election? a. A b. B c. Neither A nor B will win this election. d. Both A and B will receive an equal number of votes.

a. A

(Figure: Economic Freedom and Living Standards) Refer to the figure. Based on the data in this chart, the country with the lowest level of economic freedom is: a. Angola. b. Venezuela. c. Hong Kong. d. Haiti.

a. Angola.

A budget constraint shows all the consumption bundles that a consumer can afford given his or her __________________ and __________________. a. Income and prices b. Utility and prices c. Income and utility d. None of the above

a. Income and prices

Advertising is a way for club goods to be given away free. a. True b. False

a. True

Already, nearly 30% of seafood species have collapsed. a. True b. False

a. True

A private cost is: a. a cost paid by the consumer or the producer trading in the market. b. a cost paid by people other than the consumer or the producer trading in the market. c. the cost paid by everyone trading in all markets. d. the cost of reaching an agreement.

a. a cost paid by the consumer or the producer trading in the market.

An incumbent president can take advantage of voters' myopia to win a reelection by: a. applying policies with small immediate gains but large costs in the future. b. applying policies with small immediate costs but large gains in the future. c. applying only policies that have the same amount of gains as costs, so there is no net benefit. d. doing nothing

a. applying policies with small immediate gains but large costs in the future.

In 2011, police in Appleton, WI, shut down a lemonade stand run by two young girls. The girls, who live near the venue for the annual Appleton Old Car Show, were subject to a recent ordinance that barred anyone from selling products within a two-block radius from local events. Local Alderman Peter Stueck defended the law, saying, "It's certainly not that Appleton is against little girls setting up their cookie and lemonade stands. But the overall intent of the ordinance was to protect the vendors at these events." Which concept best explains why this law had support to begin with? a. diffuse costs and concentrated benefits b. median voter theorem c. voter myopia d. rational ignorance

a. diffuse costs and concentrated benefits

Costs or benefits that fall on bystanders, not consumers or producers trading in the market are known as: a. externalities. b. social costs c. Transaction costs. d. Pigouvian taxes.

a. externalities.

The market equilibrium is not efficient when the consumption of a good creates external costs, which cause social costs to be: a. greater than private costs b. greater than the total cost c. less than the total cost d. less than private costs

a. greater than private costs

A good is excludable if: a. people who do not pay can be easily prevented from using the good. b. one person's use of the good does not reduce the ability of another person to use the same good. c. people who do not pay cannot be easily prevented from using the good. d. it is Wi-Fi or a similar service.

a. people who do not pay can be easily prevented from using the good.

The price of antibiotics sends the wrong signal because it includes the: a. private cost but not the external cost. b. external cost but not the private cost. c. social cost but not the private cost. d. external cost but not the social cost.

a. private cost but not the external cost.

A tornado warning siren is an example of a: a. public good. b. rival public good. c. common resource. d. private good.

a. public good.

A woman approached Senator Adlai Stevenson when he was running for president, saying, "Senator, you have the vote of every thinking person!" The Senator is often credited with responding: "That's not enough, madam, we need a majority!" Which concept does this quip best reflect? a. rational ignorance b. opportunity cost c. diffuse costs and concentrated benefits d. median voter theorem

a. rational ignorance

Which is an example of an external cost? a. secondhand smoke. b. the cost you pay your plumber to install a new hot water heater. c. your high electric bill that results from leaving your lights on all night. d. decreased gas prices for drivers of SUVs.

a. secondhand smoke.

An example of a common resource is: a. the environment. b. clothing. c. a street light d. cable TV

a. the environment.

According to public choice theory, people do not always make informed choices because: a. the incentives to become informed are low as compared with the costs of being informed. b. they are ignorant by nature. c. they are irrational, so their decisions are not predictable. d. they believe making informed choices are the tasks only for the government.

a. the incentives to become informed are low as compared with the costs of being informed.

If an indifference curve is straight (i.e., it doesn't "bow" inward), the marginal rate of substitution is always constant. a. true b. false

a. true

According to the text, popular surveys about government programs show evidence that the majority of American voters are: a. perfectly rational. b. irrational. c. rationally ignorant. d. well informed about all government programs.

c. rationally ignorant.

In How Economics Saved Christmas, economist Art Carden retold the Dr. Seuss story of the Grinch who hated Christmas and stole the decorations, food, and presents from neighboring Whoville. Complete this passage from Carden's poem: "He reached for his textbook; he knew what to do. He'd fight them with ideas from AC Pigou. This idea has merit; He thought in the frost - A __________ that was equal to _____cost. a. tax; total b. subside; private c. tax; external d. subsidy; social

c. tax; external

An example of a common resource would be: a. a street light. b. clothing. c. the environment. d. cable TV

c. the environment.

Command and control methods do not always produce the most efficient outcomes because: a. it does not always allow suppliers to produce the efficient market quantity. b. consumers are sometimes misled regarding their own preferences. c. they lack the flexibility to allow buyers and sellers to choose the least costly methods to alter their behavior. d. it reduces consumption in all cases.

c. they lack the flexibility to allow buyers and sellers to choose the least costly methods to alter their behavior.

As countries become wealthier: a. they tend to have higher taxes. b. their citizens tend to become more rationally ignorant. c. they tend to become more democratic. d. the median voter becomes more important

c. they tend to become more democratic.

According to the median voter theorem, when do political outcomes change? a. when the consensus changes b. as a result of a compromise c. when the median voter changes his or her preferences d. when there is new technology to account for proper voting

c. when the median voter changes his or her preferences

Economists Besley and Burgess found that a government is more responsive to food crises when there is: a. more political competition. b. more newspapers. c. either more political competition or more newspapers. d. both more political competition and more newspapers.

d. both more political competition and more newspapers.

A beekeeper's hives are located in an orchard where the bees gather nectar to produce honey and simultaneously pollinate the orchard, which increases the yield of fruit. This benefits: a. only the owner of the orchard. b. only the beekeeper. c. the beekeeper, but it creates a negative externality because the bees are a hazard to the orchard owner. d. both the beekeeper and the orchard owner.

d. both the beekeeper and the orchard owner.

A person ________ be cheaply prevented from using national defense, a(n) ________ good. a. cannot; excludable b. can; excludable c. can; nonexcludable d. cannot; nonexcludable

d. cannot; nonexcludable

According to the text, one formula for political success is to: a. diffuse benefits and diffuse costs. b. diffuse benefits and concentrate costs. c. concentrate benefits and concentrate costs. d. concentrate benefits and diffuse costs.

d. concentrate benefits and diffuse costs.

Although the provision of club goods is ________, we typically consider it ________. a. inefficient; a big deal because it leads to many forced riders b. efficient; a big deal because it leads to other types of market inefficiencies c. inefficient; not that big a deal because we value diversity and creativity d. efficient; an inefficient allocation due to its nonrival nature

d. efficient; an inefficient allocation due to its nonrival nature

Private goods can be provided by competitive markets because they are: a. nonexcludable, providing an incentive to pay for and thus to produce these goods. b. excludable, since the market for buying and selling these goods is distinguishable. c. nonexcludable, since the market for buying and selling these goods cannot be distinguished. d. excludable, providing an incentive to pay for and thus to produce these goods.

d. excludable, providing an incentive to pay for and thus to produce these goods.

A college student who must pay fees toward a recreational facility that will be built after he has graduated and moved away is a: a. absent rider. b. free rider. c. nonrider. d. forced rider

d. forced rider

If the government were to limit the release of air-pollution produced by a steel mill to 50 parts per million, the policy would be considered a: a. corrective tax. b. subsidy. c. market-based policy. d. regulation

d. regulation

Bluefin tuna are: a. nonrival and nonexcludable. b. nonrival and excludable. c. rival and excludable. d. rival and nonexcludable.

d. rival and nonexcludable.

The ______ is the change in consumption caused by a change in relative prices holding the consumer's utility level constant. a. budget constraint b. indifference curve c. income effect d. substitution effect

d. substitution effect

Although many people, from economists to environmentalists, oppose ethanol subsidies on grounds that it is inefficient and harms the environment, politician Mitt Romney once said, "I support the subsidy of ethanol. I believe it's an important part of our energy solution in this country." Why does Mr. Romney support ethanol subsidies? I. Most of the people harmed by the subsidies are rationally ignorant and thus don't oppose the policy. II. The benefits of the subsidy are concentrated among a group of producers who provide political and financial support to politicians who support the subsidies. III. Mr. Romney's support of ethanol subsidies is not only in his self-interest but also in the public's interest. a. III only b. I and II only c. I, II, and III d. I only

b. I and II only

Market solutions to externality problems work when: I. property rights are easily identifiable. II. transaction costs are relatively low. III. the market quantity is above the efficient quantity. a. II and III only. b. I and II only. c. I only. d. I, II, and III.

b. I and II only.

Which of the following methods have been used to reduce the disincentive effects of welfare on labor supply? I. The government reduces welfare benefits by $1 of every $1 of labor income earned.II. The government limits the amount of time that someone can collect welfare.III. The government provides an Earned Income Tax Credit that supplements the income of the working poor. a. I and III only b. II and III only c. II only d. I, II, and III

b. II and III only

(Figure: Efficient Market Outcome) Refer to the figure. The efficient price and quantity are, respectively: a. P1 and Q2 . b. P2 and Q1 . c. P3 and Q2 . d. P1 and Q1 .

b. P2 and Q1 .

Which statement illustrates the concept of external cost? a. Felicia, an economics major, asks the most insightful questions in class. b. Raymond cannot open his windows at times because he lives downwind from a mushroom farm. c. A small business owner frequently buys raw materials by using her bank's line of credit. d. Margaret purchases all her food and clothing in the big city outside her residence.

b. Raymond cannot open his windows at times because he lives downwind from a mushroom farm.

The proposition that private parties with clearly defined property rights and low transaction costs can resolve externalities problems on their own is called the: a. Transaction Cost Theorem b. The Coase Theorem c. Bee Theorem d. Voluntary Cost Theorem

b. The Coase Theorem

As part of the American Recovery and Reinvestment Act, $7 million was earmarked to build a bridge over a railroad crossing so that 168 Nebraska town residents wouldn't have to wait for the trains to pass. Which of the following best explains why this proposal was passed? a. The benefits were highly diffused while the costs were very concentrated. b. The costs were highly diffused while the benefits were very concentrated. c. The costs were external while the benefits were internal. d. The total benefit to the bridge was greater than the total cost.

b. The costs were highly diffused while the benefits were very concentrated.

Which of the following is a common resource? a. public beach b. both a and b c. public roads d. none of the above

b. both a and b

Government ownership of the media: a. is uncommon in African countries. b. causes an even greater degree of rational ignorance than private ownership. c. reduces rational ignorance because governments usually require a greater number of news broadcasts. d. decreases the effectiveness of special interest groups.

b. causes an even greater degree of rational ignorance than private ownership.

Government ownership of the press and of radio: a. increases quality of government. b. decreases quality of government. c. increases the degree of economic freedom. d. decreases social corruption.

b. decreases quality of government.

A good is nonexcludable if it is: a. difficult to make people use the good at low cost. b. difficult to prevent people from using the good at low cost. c. easy to make people use the good at low cost. d. easy to prevent people from using the good at low cost.

b. difficult to prevent people from using the good at low cost.

An uneducated grandmother who does not have children living with her but pays for public school education through her property tax is a: a. absent rider. b. forced rider. c. free rider. d. nonrider.

b. forced rider.

According to Nobel Prize-winning economist Amartya Sen, famine would never take place in a: a. nondemocracy. b. functioning democracy. c. socialist state. d. state in which the government has ultimate control of food distribution.

b. functioning democracy.

Evidence suggests that voters are myopic, meaning they are responsive to economic conditions: a. before the year of an election. b. in the year of an election. c. after the year of an election. d. over the president's entire term.

b. in the year of an election.

An External Cost: a. causes markets to allocate resources efficiently. b. is a cost paid by people other than the producer or consumer trading in the market. c. affects producers , but not consumers. d. leads to economic efficiency only when private costs are greater than external costs.

b. is a cost paid by people other than the producer or consumer trading in the market.

If the price of a good does not take into account all of the relevant costs of its production, then the price of that good is too: a. low, and the product will be underproduced. b. low, and the product will be overproduced. c. high, and the product will be underproduced. d. high, and the product will be overproduced.

b. low, and the product will be overproduced.

Both public goods and common resources are: a. excludable b. nonexcludable c. rival d. nonrival

b. nonexcludable

Both public goods and common resources are: a. rival. b. nonexcludable. c. excludable. d. nonrival.

b. nonexcludable.

30. People have little incentive to produce a public good because: a. social benefits are typically less than total costs. b. of the free rider problem. c. production is impossible. d. fixed costs are usually too high.

b. of the free rider problem.

A good is nonrival if: a. one person's use of the good reduces the ability of another person to use the same good. b. one person's use of the good does not reduce the ability of another person to use the same good. c. the good does not cause rivalry between the people using the good. d. the good potentially creates rivalry between the people using the good.

b. one person's use of the good does not reduce the ability of another person to use the same good.

Economic conditions are a ______ predictor of U.S. presidential election outcomes. a. good b. poor c. fair d. volatile

b. poor

A free rider is a person who: a. will purchase products only when on sale. b. receives the benefits of a good but avoids paying for it. c. avoids paying taxes by using tax code loopholes. d. produces goods at no cost.

b. receives the benefits of a good but avoids paying for it.

A jump rope is a: a. common good. b. rival good. c. nonrival good. d. public good

b. rival good.

A tragedy of the commons often results from ______ and ______. a. nonrivalry; nonexcludability b. rivalry; nonexcludability c. nonrivalry; excludability d. rivalry; excludability

b. rivalry; nonexcludability

A free market void of externalities ________ social surplus. a. maximizes b. sometimes maximizes c. does not maximize d. precludes

b. sometimes maximizes

An issue that generates substantial benefits to a small group of individuals while imposing a small cost on many others is called a: a. nonissue. b. special-interest issue. c. popular issue. d. minority issue

b. special-interest issue.

If an individual's labor supply curve is downward sloping, this indicates that: a. the individual has become wealthier. b. the income effect dominates the substitution effect. c. the substitution effect dominates the income effect. d. the individual faces a diminishing marginal utility for leisure

b. the income effect dominates the substitution effect.

(Figure: Economic Freedom and Living Standards) Refer to the figure. Based on this chart, we can conclude that: a. greater economic freedom causes a higher standard of living. b. there is a positive relationship between economic freedom and GNI per capita. c. higher GNI per capita raises the level of democracy. d. the wealthiest countries in the world are all democracies.

b. there is a positive relationship between economic freedom and GNI per capita.

During the Middle Ages, many villages had areas reserved for families to take their cows or sheep to graze. All families were welcome to use this land without charge. This situation likely led to a(n): a. finite of proportions. b. tragedy of the commons. c. marketable public good. d. exhaustive equilibrium.

b. tragedy of the commons.

(Figure: Coffee and Comic Books) Refer to the figure. A consumer has $5 to spend on comic books (priced at $1 per comic book) and coffee (priced at $1 per cup). Using the figure, how many comic books and cups of coffee will this consumer purchase? a. three comic books and two cups of coffee b. two comic books and three cups of coffee c. 2.5 comic books and 2.5 cups of coffee d. one comic book and four cups of coffee

b. two comic books and three cups of coffee

In which of the case below is there the potential for a free-rider problem? a. cable Internet service b. voluntary payments for a smog reduction program c. half-off sales at department stores d. group projects where all members have clearly assigned tasks and are responsible for presenting their work

b. voluntary payments for a smog reduction program

A cable television show like The Sopranos, for example, is: a. rival and excludable. b. rival but nonexcludable. c. nonrival but excludable. d. nonrival and nonexcludable

c. nonrival but excludable.

A forced rider is someone who: a. does not pay a share of the costs of a public good and does not enjoy the benefits. b. pays a share of the costs of a public good and enjoys the benefits. c. pays a share of the costs of a public good but who does not enjoy the benefits. d. does not pay a share of the costs of a public good but who enjoys the benefits.

c. pays a share of the costs of a public good but who does not enjoy the benefits.

(Figure: ABC Company) Refer to the figure. The figure depicts the market for a water cleaner for home aquariums. After use it gets washed down drains and enters into streams where it improves the mineral content of the water and thus leads to better water quality and better fish growth. If the users of the cleaner were given a subsidy to compensate them for the benefit they are creating for the ecological system, how much deadweight loss is removed from this market? a. $1,200 b. $3,000 c. $3,600 d. $2,400

a. $1,200

(Figure: External Benefit) Refer to the figure. Shingles is a painful and blistering skin rash that generally affects older adults. The shingles virus is transmitted by those with an active outbreak, and it can cause chicken pox in people who never had it. In this figure depicting the market for shingles vaccinations, what is the external benefit of a shingles vaccine? a. $4 b. $7 c. $10 d. $5

a. $4

When the government intervenes in markets with external costs, it does so in order to: a. ensure all the costs are born by producers b. ensure all the costs are born by consumers c. protect the interests of bystanders d. increase the welfare losses of producers

c. protect the interests of bystanders

(Figure: Budget Constraint 2) Refer to the figure. A consumer has $45 to spend on movie and music downloads per month. What is the price per movie and music download? a. $15 per movie download and $0.45 per music download b. $3 per movie download and $1 per music download c. $2.50 per movie download and $1.50 per music download d. $10 per movie download and $0.80 per music download

b. $3 per movie download and $1 per music download

(Figure: ABC Company) Refer to the figure. The figure depicts the market for a water cleaner for home aquariums. After use it gets washed down drains and enters into streams where it improves the mineral content of the water and thus leads to better water quality and better fish growth. What is the dollar amount of the external benefit created per can of the cleaner? a. $12 b. $6 c. $3 d. $15

b. $6

(Figure: Indifference Curve 2) Refer to the figure. Which point generates the highest level of utility for the consumer? a. A b. B c. C d. D

b. B

(Figure: Comic Books and Coffee 2) Refer to the figure. If the price of comic books in the figure is $0.50, the marginal utility per dollar for the third comic book is: a. $11.00. b. $5.50. c. $22.00. d. $11.50.

c. $22.00.

(Table: Costs of Antibiotics) Refer to the table. The marginal social cost of the fifth unit is: a. $15. b. $5. c. $35. d. $30.

c. $35.

A common resource is: a. rival but nonexcludable. b. a good that, when used by one person, leaves less for everyone else. c. All of the answers are correct. d. likely to be overutilized

c. All of the answers are correct.

A major difference between a private good and a public good is that private goods: a. are rival, public goods are not. b. are excludable, public goods are not. c. All of the answers are correct. d. can be produced in efficient quantities while public goods generally are not.

c. All of the answers are correct.

(Figure: Kidney Trade Ban Policy Spectrum) Refer to figure. If A, B, and C are all candidates in the election, and an open market for kidney trading is the only issue being debated, based on the median voter theorem, which candidate will win the election? a. A b. B c. C d. A, B, and C will each receive an equal number of votes.

c. C

Which statement correctly describes what a Pigouvian subsidy is? a. Lower corporate tax rates are also known as Pigouvian subsidies b. Taxes on producers creating negative externalities are called Pigouvian subsidies c. Pigouvian subsidies are awarded to producers whose goods have external benefits d. subsidies received by the producers are called Pigouvian subsidies

c. Pigouvian subsidies are awarded to producers whose goods have external benefits

In 2011, a tsunami along the Japanese coast damaged nuclear power plants that leaked dangerous radiation into the surrounding population. If this leakage could have been prevented, given a disaster of this level, which answer would be a Coasian solution to this externality? a. A ban on all future Japanese nuclear power plants and the shutdown of existing ones in Japan. b. None of these would be a Coasian solution. c. The injured demanding compensation through a class-action lawsuit. d. The government fining the firm that owns the power plants.

c. The injured demanding compensation through a class-action lawsuit.

An example of a private good would be: a. cable TV. b. a tornado siren. c. a piece of fruit. d. a fireworks display

c. a piece of fruit.

In the public sector, politicians: a. pursue primarily the general public interest since competition is less intense in the public sector. b. pursue primarily the general public interest since they are concerned mostly with the collective good. c. act in the narrow self-interest of their constituents and contributors to remain in office. d. respond to the broader active political interests even though they choose to be rationally ignorant.

c. act in the narrow self-interest of their constituents and contributors to remain in office.

(Table: Costs of Antibiotics) Refer to the table. The deadweight loss in the market could be eliminated if the government: a. subsidized consumption by $5 per unit. b. equated marginal benefit with external cost. c. added a $10 tax per unit. d. outlawed the production of the good.

c. added a $10 tax per unit.

In which of the following decisions is a person likely to be rationally ignorant? a. deciding which car to buy b. deciding where to live c. deciding which mayoral candidate to vote for d. deciding which television show to watch

c. deciding which mayoral candidate to vote for

Much to the chagrin of some Americans, conventional light bulbs were effectively banned in 2014 leaving only compact florescent lights (CFLs) on store shelves. The ban was encouraged, in part, by the makers of the more expensive CFLs. Which concept is best captured in this story? a. rational ignorance b. opportunity cost c. diffused costs and concentrated benefits d. median voter theorem

c. diffused costs and concentrated benefits

If a steel manufacturer does NOT hear the entire cost of the sulfur dioxide it emits, it will: a. emit a lower level of sulfur dioxide than is socially efficient b. emit an acceptable level of sulfur dioxide c. emit a higher level of sulfur dioxide than is socially efficient d. not emit any sulfur dioxide in an attempt to avoid paying the entire cost

c. emit a higher level of sulfur dioxide than is socially efficient

The tragedy of commons is more likely to apply to: a. oil, natural gas, and coal. b. chickens and other farm animals. c. forests, fish, and elephants. d. microchips, semiconductors, and relay switches.

c. forests, fish, and elephants.

The ______ is the change in consumption caused by a change in purchasing power from a price change. a. budget constraint b. indifference curve c. income effect d. substitution effect

c. income effect

The opportunity cost of income is typically termed: a. time at home. b. time away from work. c. leisure time. d. avocation time.

c. leisure time.

In a democratic society, the idea that there is a tendency for a given policy to reflect the middle view of all political ideals is called the: a. voting paradox. b. arrow impossibility theorem. c. median voter theorem. d. public choice theorem.

c. median voter theorem.

(Figure: ABC Company) Refer to the figure. The figure depicts the market for a water cleaner for home aquariums. After use it gets washed down drains and enters into streams where it improves the mineral content of the water and thus leads to better water quality and better fish growth. What is the efficient quantity in this market? a. 3,600 b. 1,600 c. 400 d. 2,000

d. 2,000

How are democracy and wealth related? a. Once people's basic needs have been met, there is an increased demand for democracy and political participation. b. Democracy is associated with institutions (free press, private property rights, lower levels of corruption) that are favorable toward growth and wealth accumulation. c. Neither A nor B is correct. d. Both A and B are correct.

d. Both A and B are correct.

Solving a tragedy of the commons problem could be done through: I. establishment of property rights over the common resource. II. the invisible hand. III. government-armed protection. a. I, II, and III b. II only c. I and II only d. I and III only

d. I and III only

Data for the United States show that the incumbent party tends to win the election if: I. personal disposable income is growing. II. the inflation rate is low. III. the political party has not been in power for too many continuous terms. a. I only b. I and II only c. I and III only d. I, II, and III

d. I, II, and III

Government solutions to externality problems include: I. Pigouvian taxes II. Tradable allowances. III. command and control. a. II and III only. b. I and III only. c. I only. d. I, II, and III.

d. I, II, and III.

According to the text, the 1974 famine in Bangladesh was largely a result of a. a lack of food supply. b. rapid population growth. c. an earthquake. d. bad government policies.

d. bad government policies.

You are considering planting a garden of beautiful flowers in your front yard. It would cost you $45 in time and materials to plant it. You would get $40 worth of benefits from the garden, and your neighbor who walks by your front yard everyday, would get $10 worth of benefits from it. Which statement is true? a. the efficient equilibrium is to not plant the garden, but you would do so anyway since the social benefits exceed your private costs. b. your private benefits exceed your private costs, so you would plant the garden c. the external benefits are not significant enough to affect the efficiency of this equilibrium d. the efficient equilibrium is to plant the garden, but you would not do so since your private costs exceed your private benefits

d. the efficient equilibrium is to plant the garden, but you would not do so since your private costs exceed your private benefits

One reason for the good record of democracies on economic growth is that: a. people can become rich by gaining economic resources in their favor. b. people can become rich by competing for the limited economic resources. c. the public as a whole can become rich by equally dividing the economic resources. d. the public as a whole can become rich by supporting efficient policies that generate economic growth.

d. the public as a whole can become rich by supporting efficient policies that generate economic growth.