When producers do not have to pay the full cost of producing a product, they tend to
A. underproduce the product because of a positive externality.
B. underproduce the product because of a negative externality.
C. overproduce the product because of a positive externality.
D. overproduce the product because of a negative externality.
Answer: D
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A single-price monopolist is inefficient because
A) MR = MC. B) P > ATC. C) it creates a deadweight loss. D) it increases producer surplus.
What is the difference between a pure strategy and a mixed strategy?
What will be an ideal response?
The phenomenon that some consumers pay a higher interest rate when they borrow than the interest rate they receive when they lend is best described as an example of
A) irrational behavior. B) a credit market imperfection. C) a vast banking conspiracy. D) the burden of public debt.
Use the following table to answer the next question. Gross Investment$172 billionNet Foreign Income$18 billionIndirect Business Taxes$15 billionRent Net Exports-$96 billionDepreciation (Capital Consumption)$145 billionGovernment Purchases$188 billionWages$763 billionProfits and Losses$90 billionConsumption$895 billionInterest$74 billionWhat is the value of rent?
A. $1,141 billion B. $54 billion C. $2,264 billion D. $90 billion