A homeless family is given a government subsidy for an apartment in an affordable housing project. The apartment
A) is not subject to the principle of rival consumption.
B) is not a public good.
C) has widespread benefits and concentrated costs.
D) is subject to the free-rider problem.
Answer: B
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Which of the following CORRECTLY characterize principals and agents in important examples of the principal-agent problem?
A) In the doctor/patient relationship, the patient is the principal and the doctor is the agent. B) In the lawyer/client relationship, the client is the principal and the lawyer is the agent. C) Both of the above answers are correct. D) Neither of the above answers is correct.
The fact that articles of clothing sold in Walmart are produced by very poorly paid workers in Honduras, is a fact that if taken into account
A) would prove to economists that the Ricardian model of comparative advantage is false. B) would prove to economists that the equal-value in trade concept summed up in the trade triangles is incorrect. C) proves to economists that trade is a negative sum game. D) proves to the Anti-Globalization Movement that trade is a negative sum game. E) proves that corporations are exempt from labor standards.