If there is a negative externality involved in producing good X, then
A. engaging in international trade will solve the inefficiency.
B. a subsidy to the producer of good X can correct the inefficiency involved.
C. the production possibility curve will be too steeply sloped toward good X.
D. None of these is true.
Answer: D
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Indicate whether the statement is true or false
A college student working in a minimum-wage job has a __________ opportunity cost of __________ than a college dean
a. lower; market work b. lower; leisure c. higher; market work d. higher; nonmarket work e. higher; leisure
Purchasing power parity exists when domestic currency:
a. maintains a fixed exchange rate with foreign currency. b. is not convertible into foreign currency. c. buys more goods at home than abroad. d. buys as many goods at home as it does abroad. e. appreciates in value against foreign currency.
Which of the following statements is true regarding profit-maximizing markup for a Cournot oligopoly with N identical firms?
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