One of the conclusions of A. C. Pigou was that
A. a system of mandatory controls is the only effective means to control pollution.
B. a system of charges can be an effective means to control pollution.
C. pollution will wither away if a socialist system is in place.
D. pollution cannot be adequately addressed in a price system.
Answer: B
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The problem of "free riders" arises in a society when goods
A) can't be provided exclusively to the people who pay for them. B) cease to be scarce. C) produced by government are provided to everyone. D) supplied by the private sector are paid for from tax revenue. E) wanted by everyone are priced too low.
Prices provide the rationing function best when
A) prices are flexible. B) prices are inflexible. C) they are used in conjunction with queuing. D) price controls are in place and ration coupons are used too.
Which of the following statements is consistently associated with the standard migration model?
A. The decision to move is expected to increase the household's overall utility. B. Return migration occurs only when the mover regrets having made the initial move. C. Moving for job reasons is always done at the expense of family desires. D. Repeat migration occurs only when the mover is moving for job-related reasons. E. Repeat migration occurs only when the mover regrets having made the initial move.
Figure 14-5
In , AD1 and SRAS1 indicate an economy initially operating at full-employment output level, Y1. The short-run impact of the Fed unexpectedly shifting to a more restrictive monetary policy will be
a.
a decrease in aggregate demand to AD2 and a decrease in real output to Y2.
b.
a decrease in aggregate demand to AD2 but real output would remain at Y1.
c.
a decrease in aggregate demand to AD2 and an increase in short-run aggregate supply to SRAS2, causing the price level to fall to P3 and real output to remain unchanged at Y1.
d.
no change; AD and SRAS will stay at AD1 and SRAS1.