A result of a positive externality in the production of a good is that
A) the price system will over-allocate resources to the production of that good or service.
B) the price system will under-allocate resources to the production of that good or service.
C) the market supply will be too high.
D) the market demand will be too high.
Answer: B
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Refer to the table below. If the discount rate is 4 percent and the cost of the investment is $40,000, what is the net present value of the investment?
The above table shows the future operating profits from an investment. The future operating profits are earned at the end of each of the respective years.
A) $44,469.77
B) $5,815.32
C) $45,815.32
D) $6,221.77
Which of the following is an example of a market that meets all four conditions for perfect competition?
(A) Books (B) Jeans (C) Wheat (D) Bagels
According to adaptive expectations theory, expansionary monetary and fiscal policies to reduce the unemployment rate are:
A. useless in the long run. B. useless in the short run. C. ineffective on the price level. D. successful at achieving the desired outcomes.
Central bankers with a relatively steep monetary policy reaction curve will:
A. move interest rates more aggressively when inflation rises, leading to more volatility in output. B. move interest rates less aggressively when inflation rises, leading to less volatility in output. C. move interest rates more aggressively when inflation rises, leading to less volatility in output. D. move interest rates less aggressively when inflation rises, leading to more volatility in output.