Chapter 1 |10 Questions| With Correct Answers.

The market failure associated with cable TV arises from the _____________ the cable TV firm, which allows the firm to have a substantial influence on market prices. {Ans: market power of}Which of the following government activities is motivated by a concern about efficiency? {Ans: - Prohibiting smoking in public places - Instituting laws against driving while intoxicated - Regulating cable TV prices - Breaking up Standard Oil (which once owned 90% of all oil refineries) into several smaller companies}Paying laid-off workers unemployment benefits until they find a new job will likely ______ equality and ______ efficiency. {Ans: increase; decrease}Which of the following describe some of the trade-offs faced by a member of Congress deciding how much to spend on national parks? {Ans: - Congress can spend either a small amount on a lot of parks or a large amount on a single national park. - Money spent on national parks benefits park visitors, but alternatively the money could be spent on highways to benefit drivers.}Which of the following describe some of the trade-offs faced by a recent college graduate deciding whether to go to graduate school? {Ans: - If she goes to graduate school, she