20) Points inside the utility possibility frontier are......... A) underemployed B) unattainable. C) endowment points. D) equilibrium points. Question 21 Statement 1: A Pareto improvement cannot take place unless compensation is made to both parties Statement 2: If Pareto improvement is not possible, then we have a situation known as Pareto Optimality A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False Question 22 Statement 1: Supposing that production of a good creates a negative externality, then an excise tax equivalent to the difference between the marginal social cost and the marginal private cost of production can correct the inefficiency. Statement 2: Positive externalities create excess demand A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are FalseQuestion 23 Statement 1: The organic philosophy view of society says that "greed is good" because it helps maximize its potential. Statement 2: Mechanistic view of government can also be regarded as non-classical economic concept A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False Question 24 Statement 1: Public Debt is the same as Budget Deficit if government does not owe Statement 2: Public Debt is always bad A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False Question 25 Statement 1: A Pareto efficient allocation occurs when a person can be made better off without making another worse off. Statement 2: The marginal social benefit of a good is assumed to decline as more of that good is made available each time. A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False Question 26 Statement 1: In Ghana's financial management and conduct, only parliament has the authority to impose tax on the people. Statement 2: The budget provides a channel for accountability for the legislature but not the executive A) Statement 1 is True; Statement 2 is False B) Statement I is False; Statement 2 is True C) Both statements are True D) Both statements are FalseQuestion 27 Statement 1: The crowding-out effect is caused by a rise in interest rates resulting from an increase in government borrowing in the goods market to finance government expenditures. Statement 2: The sale of state assets to finance budget deficit leads to crowding-out the private sector A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False Question 28 Statement 1: By taxing polluters an amount per unit of the good produced equal to the cost of the negative externality, the quantity of pollution generated is reduced. Statement 2: Without government intervention, negative externalities are borne directly by producers of goods or services. A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False Question 29 Statement 1: Tax evasion is the purposeful effort to pay legally due taxes. Statement 2: Direct taxes are better tools for redistributing inequalities than indirect taxes. A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False Question 30 Statement 1: Economic efficiency requires that a given output of a good or service be produced in the least costly way Statement 2: The marginal condition for efficient allocation of resources requires that Marginal Social Benefit equals Marginal Social Cost. A) Statement 1 is True; Statement 2 is False B) Statement 1 is False; Statement 2 is True C) Both statements are True D) Both statements are False