Suppose that cookie producers create a positive externality equal to $2 per dozen. What is the relationship between the equilibrium quantity and the socially optimal quantity of cookies to be produced?
a. They are equal.
b. The equilibrium quantity is greater than the socially optimal quantity.
c. The equilibrium quantity is less than the socially optimal quantity.
d. There is not enough information to answer the question.
c
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Use the table below to answer the next question.YearEmployedStructuralFrictionalCyclicalUnemployed20031,800501005020020042,400100100 30020052,000 15018050020062,66040 0140Determine the number of people cyclically unemployed for the year 2004.
A. 200 B. 100 C. -100 D. 0
The principal reason why the chain-weighted index for GDP and the CPI both overstate actual changes in prices is that
A) the basket of goods purchased by consumers never changes. B) price data is often inaccurate. C) it is hard to measure quality changes. D) all of the above
Using the HO model, assume that the United States is capital abundant and Mexico is labor abundant. If soybeans are capital intensive and avocados are labor intensive,
A) Mexico will produce more soybeans once trade is introduced. B) the United States will produce more avocados once trade is introduced. C) avocado prices in the United States will fall once trade begins. D) soybean prices in Mexico will rise once trade begins.
The 1980s were characterized by ________ monetary policy and ________ fiscal policy.
A. tight; easy B. easy; easy C. tight; tight D. easy; tight