In 2009,the Federal Government Created a Program Called Cash for Clunkers

question 28

Multiple Choice

In 2009,the federal government created a program called Cash for Clunkers whereby consumers could trade in a less efficient car for a more efficient car and receive a higher value than they would have otherwise.How would an economist understand the decision that consumers faced?

• A) Consumers would compare the marginal benefits to the marginal costs of replacing their car, and this program made sure that marginal benefits would exceed marginal costs.
• B) Consumers would compare the marginal benefits to the marginal costs of replacing their car, and this program made sure that marginal costs would exceed marginal benefits.
• C) The Cash for Clunkers program increased the opportunity cost of replacing a car.
• D) The Cash for Clunkers program served as a negative incentive to replacing a fuel-inefficient car.
• E) The Cash for Clunkers program served as an indirect incentive to replacing a fuel-inefficient car.

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The act of freely offering to perform a service or undertake a task without expecting compensation in return.

Heredity

Heredity is the passing on of physical or mental characteristics genetically from one generation to another.

Nurture

The influence of the environment on personality, physical growth, intellectual growth, and social interactions.

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Factors external to the individual, such as social, cultural, and physical environments, that impact behavior, attitudes, and development.