Government has the power to reduce the _____ associated with air pollution by automobiles because it can force changes in car design, can impose taxes on drivers, and has the power to punish those who fail to comply
a. private cost
b. transaction cost
c. opportunity cost
d. positive externality
B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Potential GDP is estimated to grow at a rate of 3.2% in the United States. Actual GDP in the U.S
A) always grows at a slower rate than potential GDP. B) is the same as potential GDP if all firms in the economy were working at capacity. C) always grows at the same rate as potential GDP. D) always grows at a faster rate than potential GDP.
Assume that the farmers know that their revenues would increase if each would take a certain amount of acreage out of production. An agreement to do so
A) would not be made because the farmers have no incentive to enter into it. B) would not be made because it would contradict the assumption that farmers are profit maximizers. C) probably would not be adhered to, if made, because it would be disadvantageous for the farmers as a group. D) probably would not last, if made, because each farmer would have an incentive to break it.
If both the demand for and the supply of smartphones are increasing, which of the following statements is TRUE?
A. It is impossible to know, given only this information, whether the prices of smartphones will go up or down in the future. B. The consumer should wait and buy a smartphone later since the price will be lower in the future. C. The consumer should buy a smartphone now since the price will be higher in the future. D. The price of a smartphone will be the same in the future as it is now.