What does internalizing an externality refer to?
a) making certain government does not disrupt the internal workings of the market
b) making buyers pay the full price for the products they purchase
c) making certain that all market transaction benefits go to only buyers and sellers
d) making buyers and sellers take into account the external effects of their actions
Ans: d) making buyers and sellers take into account the external effects of their actions
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Suppose Barry is maximizing his utility from consuming used paperback novels and audio books. The price of a used novel = $4 and the price of an audio book = $8
If the marginal utility of the last novel was 32 units of utility (utils) what was the marginal utility of the last audio book purchased? A) 2 utils B) 12 utils C) 16 utils D) 64 utils
The PIH and LCH theories ________ the case for activism, while the procyclical behavior of consumer spending for durable goods ________ the case for activism
A) supports; supports B) supports; does not support C) do not support; does not support D) do not support; supports
If productivity growth in Japan exceeds productivity growth in the U.S., to the point that the resource cost in ALL Japanese industries is lower than in the U.S., then
A. there is no feasible way for the U.S. and Japan to continue to trade. B. mutually beneficial trade is possible. C. trade between the U.S. and Japan is possible, but only Japan will benefit from it. D. trade between the U.S. and Japan is possible, but only the U.S. will benefit from it.
In the United States during the 1950s and 1960s:
A. the inflation rate was frequently less than 2 percent a year. B. prices fell. C. prices rose sharply. D. there was zero inflation.