Which of the following can result in a market producing an inefficient quantity of a good? i. competition ii. an external cost or an external benefit iii. a tax
A) i only
B) iii only
C) ii only
D) ii and iii
E) i and iii
D
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Holding all else constant, an increase in the preferences of Americans for Mexican goods will ________ the supply of dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. decrease; decrease B. decrease; increase C. increase; increase D. increase; decrease
If you earn income now and expect to live off savings in the future, then a raise now will cause you to save more so long as consumption -- now and in the future -- is a normal good.
Answer the following statement true (T) or false (F)
Total fixed costs decrease as output expands
a. True b. False
An example of automatic stabilizers is
A. taxes falling in an expansion. B. taxes rising in a recession. C. government spending rising in a recession. D. all of the above