If the production of a good generates external benefits, the government could increase efficiency by
A. regulating production of the good to reduce the amount produced.
B. requiring all producers of the product to be licensed to produce the product.
C. subsidizing production of the good to increase the amount produced.
D. taxing the production of the good to reduce the amount produced.
Answer: C
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Indicate whether the statement is true or false
A major reason for creating the European Monetary System was to
A) create a single currency. B) unify banking laws and permit cross-border investment. C) avoid competitive devaluations. D) reduce the costs of changing currencies. E) eliminate the need for central banks.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
Suppose that a consumer has a health insurance program with $10 co-payment per doctor visit. If the consumer purchases 6 doctor visits and the bill charged by the doctor for 6 visits is $360, the cost per visit paid by a third party is:
A. $40. B. $70. C. $60. D. $50.