If a program requires people to pay a price that reflects the cost of an externality associated with their actions that they previously did not pay, it will be in their best interest to change their behavior.
Answer the following statement true (T) or false (F)
True
If a person were required to pay the higher price that reflects the cost of an externality, that person would reduce quantity demanded (law of demand).
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The expenditure approach to measuring GDP is based on summing
A) wages, interest, rent, and profit. B) each industry's production. C) the total values of final goods, intermediate goods and services, used goods, and financial assets. D) consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services. E) consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services minus wages, interest, rent, and profit.
An expenditure maximizing multi-product firm will set the same relative prices as a welfare maximizing firm
Indicate whether the statement is true or false
In which setting are the transaction costs of making an exchange likely to be the highest?
A) buying cereal at the grocery store B) buying a house C) buying a computer over the Internet D) buying stock in a company E) buying a Big Mac at McDonald's
Which of the following is the primary source of high earnings in a market economy?
What will be an ideal response?