Which of the following scenarios depict the "Law of Unintended Consequences" as discussed in the topic of Government Failure?

a. The government raises the price of cigarettes to curb smoking but this results in the loss of revenues from cigarette taxes as consumers resort to smuggled cigarettes instead.

b. The government drafts many laws against environmental pollution but suffer from lack of enforcement of these laws due to budgetary constraints.

c. The government provides free Covid-19 vaccinations to the public but there still remains a minority group of anti-vaxxers.

d. The Malaysian government issues a ban on the sale of RON95 petroleum to foreign registered cars to ensure that the petrol subsidy is given only to Malaysians.

Suppose Zaharah (Z) and Quah (Q) are now at an allocation bundle where their marginal rates of substitution (MRS) are given by MRS_Z = 10 and MRS_Q = 5, respectively. In general equilibrium analysis, this suggests that.

a.both of them are in equilibrium

b.both individuals have already engaged in voluntary exchange of resources

c.Zaharah's situation is better off than Quah

d. there exists a basis for voluntary exchange for resources between both

Suppose it is possible to predict the likelihood of any illnesses based on an individual's DNA information. What effect might this have on the medical health insurance industry?

a.Average insurance payments would go up because the adverse selection problem would increase.

b. Average insurance payments would go up because the adverse selection problem would decrease

c. Average insurance payments would go down because the advserse selection problem would increase

d.Average insurance payments would go down because the adverse selection problem would decrease.

Johan and Jeganathan both advertised to sell their used car in the internet and Ah Lim is an interested buyer. Johan's car is a "lemon" because the engine is faulty but one cannot tell from the body of the car. Jeganathan's car is a "peach" because he always takes good care of it. Ah Lim is unable to differentiate the quality between the two cars. In economic theory, signaling may help to solve this problem of lack of information. Which party has the most incentive to use signaling in this case?

a. Ah Lim

b.Both Johan and Jeganathan

c.Johan but not Jeganathan

d.Jeganathan but not Johan

If Ali is willing to pay RM100,000 for a used BMW that is a "peach" and RM30,000 for a used BMW that is a "lemon", then Ali will offer .

a.RM30,000 for any used BMW even if the probability that it is a "lemon" is 50%

b.RM130,000 for any used BMW if the probability that it is a "peach" is 50%

c.RM100,000 for any used BMW even if the probability that it is a "peach" is 50%

d.RM65,000 for any used BMW if the probability that it is a "lemon" is 50%