When a person throws a cigarette out of a car window and starts a brush fire, this is
A. an example of a public good.
B. an example of an external cost.
C. an example of market power.
D. an example of an external benefit.
Answer: B
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When the dollar depreciates, the cost to Americans of foreign goods
A. rises and the CPI falls. B. rises and the CPI rises. C. falls and the CPI rises. D. falls and the CPI falls.
The long-run aggregate supply curve is
A) horizontal at the full-employment level of real Gross Domestic Product (GDP). B) vertical at the full-employment level of real Gross Domestic Product (GDP). C) sloping upward due to the effects of price level changes on real Gross Domestic Product (GDP). D) the same as the short run aggregate supply (SRAS) curve.
If price is determined as a multiple of costs, then a firm is using
A) cost plus pricing. B) product line extension pricing. C) peak-load pricing. D) marginal cost pricing.
Figure 4.3 illustrates the demand for tacos. A decrease in the price of tacos would bring about a movement from:
A. point a to point c. B. point c to point a. C. D2 to D0. D. D0 to D2.