The free rider problem causes less than optimal production of a public good.
A. True
B. False
C. Uncertain
A. True
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The optimal level of pollution is:
a. the level at which the marginal social cost of air quality equals the marginal social benefit. b. the level at which the average social cost of air quality equals the average social benefit. c. the level at which the total social cost of air quality equals the total social benefit. d. zero.
Under socialism, which of the following industries would probably be owned by the government?
a. Steel. b. Electricity. c. Agriculture. d. All of these.
If the price of output increases, the labor ________ curve shifts to the ________.
A. demand; left B. demand; right C. supply; left D. supply; right
All of the following statements are true about the real exchange rate, = , EXCEPT
A) a greater change in P (domestic price) compared to a change in P (foreign price) necessitates a rise in the nominal rate, Rn, to keep the real rate unchanged. B) a pegged exchange rate system requires tight control of the money supply. C) there is a one-to-one correspondence between the real and nominal exchange rates. D) an expansionary monetary policy raises the real exchange rate.