Which of the following is not correct?
a. Markets allocate scarce resources with the forces of supply and demand.
b. The equilibrium of supply and demand is typically an efficient allocation of resources.
c. Governments can sometimes improve market outcomes.
d. Externalities cannot be positive.
d
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Which of the following describes an external benefit resulting from an individual's purchase of a winter flu shot? a. A flu shot is less expensive than the cost of treatment when you get the flu
b. The income of doctors increases when you get a flu shot. c. A flu shot reduces the likelihood that others will catch the flu from you. d. A flu shot reduces the likelihood that you will miss work as a result of sickness, and, therefore, you will earn more income.
In an administrative command economy, a price below equilibrium
a. means we can buy cheap goods freely b. creates opportunities for corruption c. does not matter at all d. both a and b are correct e. none of the above
The interest rate effect, the real balance effect, and the international trade effect all begin with a change in the price level
Indicate whether the statement is true or false
As the price level rises
a. people will want to buy more bonds, so the interest rate rises. b. people will want to buy fewer bonds, so the interest rate falls. c. people will want to buy more bonds, so the interest rate falls. d. people will want to buy fewer bonds, so the interest rate rises.