Which of the following is a merit good?
A. Food.
B. Cigarettes.
C. A computer operating system.
D. Local telephone service.
Answer: A
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What is the future value of $1 (i) after 18 years if the interest rate is 4 percent, (ii) after 12 years if the interest rate is 6 percent, (iii) after 9 years if the interest rate is 8 percent, and (iv) after 6 years if the interest rate is 12
percent?
The principle tool the Fed uses to keep the federal funds rate close to the target is:
A. open market operations. B. the required reserve rate. C. the IOER rate. D. discount lending.
The difference between economies of scale and diseconomies of scale is that economies of scale ______, whereas diseconomies of scale ______.
a. are cost advantages experienced by large companies; are the benefits of remaining a small business b. give the company an advantage over smaller competitors; are problems that come with growth c. are advantages that affect a firm’s production in the short run; are experienced over the long run d. are profits realized when the market price of outputs rises; are losses suffered when prices decline
The Clear Plastic Company's plant discharges large quantities of toxic chemicals into some groundwater sources. Residents in the surrounding area have higher medical bills because of Clear Plastic's pollution. As long as Clear Plastic Company is allowed
to emit pollution and ignore any externalities, the firm will A) overproduce. B) under produce. C) charge too high a price for its output. D) be absorbing the full value of its social costs.