i. Which is not category of government spending

a. Personal Income Tax

b. National Defense

c. Human Resources

ii. Goals for studying Public Sector Economics:

a. Explain how government allocates resources

b. Establish framework to analyze government activities

c. Above all

iii. Federal Government Revenues:

a. National Defense

b. Human Resources

c. Not above

iv. Factors Affecting Market Efficiency:

a. Time frame of price adjustment

b. Prices reflect past market data

c. Not above

v. To isolate the effect of the information, Donner, Blitzen estimates a market model for

a. XYZ: rXYZ = αXYZ - βXYZrM,t + eXYZ

b. XYZ: rXYZ = αXYZ + βXYZrM,t + eXYZ

c. XYZ: rXYZ = αXYZ - βXYZrM,t - eXYZ

vi. How many levels to allocates the resources:

a. Three

b. Six

c. Two

vii. A market failure occurs when the competitive market system

a. does not allocate any resources whatsoever to the production of certain goods

b. either underallocates or overallocates resources to the production of certain goods.

c. Both

viii. When private markets fail, government involvement may arise.

a. In Private Goods

b. In Public Goods

c. Private and Public Goods

ix. Determining the "right" amount of a public good will depend on the

a. Both below

b. Marginal Cost

c. Marginal Benefit

x. Reasons for Government Failures:

a. Governments do not have an incentive to correct the problem.

b. Governments do not have the information to deal with the problem.

c. Both