When there is a divergence between social costs and private costs in a market, _____
a. the market will always provide an efficient allocation of resources
b. there will be too much or too little production and consumption in the market
c. there will be an acute shortage of goods and services in the market
d. there will be an excess supply of goods and services in the market
e. all resources are being used in their highest-valued activity
b
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Consider two economies: A and B. In economy A, the work culture is such that people do not mind working for 12 hours a day. On the contrary, in economy B, people work for a maximum of 6 hours in a day. If the culture hypothesis holds, then:
A) the growth rate in both economies are likely to fluctuate randomly. B) economy A is likely to grow faster than economy B. C) economy B is likely to grow faster than economy A. D) both economies are likely to grow at the same rate.
Which one of the following is not an example of an externality
a. Carbon dioxide emissions from a motor vehicles d. Increased costs of mining iron ore drive up the price of steel b. Acid rain damages wildlife habitat in a region downwind from a factory e. Over-fishing results in the depletion of the food supply of an endangered marine mammal c. A driver enjoys beautiful scenery while driving through a National Forest
Suppose that for every $1 increase in autonomous investment, real GDP demanded rises by $5. Which of the following must be true?
a. The line of aggregate expenditure exactly matches the line of equilibrium. b. Noninvestment expenditures increase with every increase in investment spending. c. The point of equilibrium will decrease with every increase. d. The slope of the aggregate expenditure curve is 5.
Missy Knowles is in charge of all technical developments at Gumby Polymer Rubber. She makes all the choices concerning product innovations in the company. She finds that she is overworked and that several of her research chemists seem to be spending work hours playing golf. What managerial advice would you provide to Gumby Polymer Rubber (GPR)? Clearly explain your reasoning.
What will be an ideal response?