An external cost, such as the cost generated by pollution, is
A) a cost paid by consumers of the product.
B) a cost paid by producers of the product.
C) a cost paid by a third party or by society at large.
D) not a true opportunity cost of production.
Answer: C
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Which of the following is TRUE of the Federal Reserve System?
a) It is controlled by the executive branch of the federal government. b) Its decisions must be approved by a majority vote by Congress. c) It has the power to increase the money supply. d) It does not influence interest rates.
A patent
A) grants the creator of a book, film, or piece of music the exclusive right to use the creation for 20 years. B) grants the creator of a book, film, or piece of music the exclusive right to use the creation during the creator's lifetime. C) gives a firm the exclusive right to a new product for 20 years from the date the patent application is filed with the government. D) gives a firm the exclusive right to a new product during the product inventor's lifetime.
If a decrease in income leads to a decrease in the demand for ice cream, then ice cream is
A) a complement. B) a necessity. C) a normal good. D) a neutral good.
Suppose the supply and demand of land for natural gas extraction are imperfectly elastic. Given that coal is a potential substitute for natural gas in energy applications, a change in the price of coal may shift the demand curve for natural gas
What happens to the economic rents assigned to land on which natural gas is extracted if the price of coal declines? A) Rents increase B) Rents are positive and remain unchanged C) Rents decrease D) Rents are zero before and after the change