Which of the following is not true of collective decision-making costs?
a. They impede collective action.
b. They are the reason why unanimity rule is not the optimal decision-making rule.
c. They imply that simple majority rule is the optimal decision-making rule.
d. They increase the closer the decision rule gets to unanimity.
Question 2
People derive utility in their lives from consuming goods (all other goods), g, and clean air (measured as the number of particulates removed per m3), a, as measured with the utility function U(g,a) = g0.6a0.4.
The price index of consumer goods equals 20 per day. Income equals 1000. What is likely to happen to the number of asthma cases as the price of clean air (abatement cost) increases from 10 to 20? A) Asthma cases decrease because the particulants per m3 increases by 2 units.
B) Asthma cases increase because the particulant per m3 decreases by 2 units.
C) Asthma cases increase because the particulants per m3 increase by 2 units.
D) There is not enough information to answer this question.
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