A positional externality occurs when
A. one person builds a house which obstructs his neighbor's view.
B. one person's increase in consumption lowers his neighbor's utility.
C. a drunk person decides to drive.
D. a polluter positions himself in a crowded city.
Answer: B
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In the prisoners' dilemma game, each player
A) has only one possible strategy. B) can choose from two strategies. C) can choose from three strategies. D) can choose from four strategies.
Suppose a manager is deciding how to allocate workers between two plants. The marginal product of labor in plant 1 is 10 units of output. The marginal product of labor in plant 2 is 14 units of labor. What should the manager do?
A. Reallocate workers from plant 1 to plant 2, because MPL is greater in plant 1 than in plant 2. B. Reallocate workers from plant 1 to plant 2, because MPL is greater in plant 2 than in plant 1. C. Reallocate workers from plant 2 to plant 1, because MPL is greater in plant 1 than in plant 2. D. Reallocate workers from plant 2 to plant 1, because MPL is greater in plant 1 than in plant 1.
According to John Maynard Keynes,
a. the demand for money in a country is determined entirely by that nation's central bank. b. the supply of money in a country is determined by the overall wealth of the citizens of that country. c. the interest rate adjusts to balance the supply of, and demand for, money. d. the interest rate adjusts to balance the supply of, and demand for, goods and services.
What is the estimated effect of unemployment insurance on the period of unemployment?
a. It shortens the period of unemployment. b. It lengthens the period of unemployment. c. It negates an individual’s unemployment status. d. It has no effect on the period of unemployment.