To correct for positive externalities the government
A. should create a public good.
B. should allow the price system to do the correction.
C. can impose a tax.
D. can give a subsidy.
Answer: D
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Explain how an economy can experience long-run economic growth and deflation at the same time
What will be an ideal response?
The figure above shows the market for brooms. If 400 brooms are produced,
A) consumer surplus is maximized. B) producer surplus is maximized. C) market failure and a deadweight loss occur. D) marginal cost is greater than marginal benefit. E) consumer surplus equals zero.
The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10. Which of the following CORRECTLY illustrates the principle of diminishing marginal utility? The fact that
A) the sixth magazine has less marginal utility than the sixth CD. B) Jane's marginal utility per dollar from the second magazine is the same as her marginal utility per dollar from the third CD. C) the marginal utility per dollar from the sixth magazine is less than the total utility from six magazines. D) the marginal utility of the third CD is less than the marginal utility of second CD.
In the open-economy macroeconomic model, the supply of dollars in the market for foreign-currency exchange is upward sloping
a. True b. False Indicate whether the statement is true or false