Which of the following leads to an underallocation of resources to a specific economic activity?
A) external costs
B) external benefits
C) marginal costs
D) effluent benefits
B
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On Green Island, the demand for pencils is perfectly elastic and the supply of pencils is perfectly inelastic. If a sales tax on pencils is introduced
A) the tax is split evenly between the buyers and sellers. B) the buyers pay the entire tax. C) no one pays the tax. D) the sellers pay the entire tax.
According to the Taylor rule, which of the following will lead to a higher nominal federal funds rate?
A) an increase in inflation B) a positive output gap C) a positive inflation gap D) all of the above E) none of the above
If income were distributed according to the egalitarian principle of "to each exactly the same," then one problem would be that
A) there would be little or no incentive for individuals to take risky, hazardous, or unpleasant jobs. B) individuals would have an excess desire to invest in their own human capital. C) too many individuals would want to take risky jobs. D) productivity levels would probably become too high.
Which of the following is not an example of a capital resource?
a. a drill press machine b. a pitch fork c. a commercial sewing machine d. 100 acres of farmland in central California