Answer the following questions true (T) or false (F)
1. College education tends to result in a positive externality because the recipient receives the full benefit of the education.
2. The rising cost of malpractice insurance is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.
3. "Cost disease" refers to the tendency for low productivity in the service sector to lead to higher costs in those industries.
1. FALSE
2. FALSE
3. TRUE
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As a result of the financial deregulation that allowed banks to issue new types of interest-bearing checking accounts
A) people are less willing to hold M1 at a given interest rate on alternative assets. B) the demand for money M1 curve became more stable. C) the demand for money M1 curve became vertical. D) the demand for money M1 curve will shift to the right.
Staggered price setting ________
A) leads to frequent price adjustments B) occurs when firms fail to consider the behavior of their competitors C) is generally illegal D) all of the above E) none of the above
Which of the following is likely to occur when a two-person game can be played repeatedly?
a. Collusion and cooperation among the players b. The prisoner's dilemma c. The industry demand curve will become perfectly elastic d. The industry demand curve will become perfectly inelastic e. There is no solution possible because of the indeterminate price quantity combinations
Marginal social cost would be less than marginal private cost in the presence of negative externalities
Indicate whether the statement is true or false