Chapter 1 Study Guide Graded A+

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}Which of the following describe some of the trade-offs faced by a professor deciding how much time to spend preparing for class? {Ans: - The more he prepares, the better his lectures, but the less he prepares, the more free time he can enjoy doing something else. - The better the lecture, the better his chances of tenure, but time spent preparing the lecture decreases the time he has available to work on research.}Which of the following government activities is motivated by a concern about equality? {Ans: - Imposing higher personal income tax rates on people with higher incomes - Providing some poor people with vouchers that can be used to buy food}Which of the following describe some of the trade-offs faced by a company president deciding whether to open a new factory? {Ans: - The firm can either open a new factory or upgrade existing equipment. -