When society receives more benefits from a good than the individuals who consume the good,
a. the marginal social benefit for the good is less than the marginal social cost
b. too much of the good would be produced by a private market
c. property rights are assignable and well defined
d. the good produces a positive externality
e. the good is exhaustible with fixed-production technology
D
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Suppose that the bank has the following balance sheet:
Assets Liabilities Reserves $75,000 Deposits $500,000 Loans $430,000 Net worth $5,000 If the required reserve ratio is 10 percent, what is the maximum the bank can loan out? Suppose the bank makes this loan and the borrower spends the money, which is deposited in a different bank. Show the impact of these transactions on the bank's balance sheet.
Doubling the circumference of an oil pipeline more than doubles the volume of oil that can be pumped through. This is an example of
a. production inefficiency b. diminishing marginal returns c. diseconomies of scale d. constant returns to scale e. economies of scale
An appropriate government policy toward negative externalities is to
A. subsidize the activity that creates the negative externality. B. impose a tax or fine on the activity that creates the negative externality. C. pay money to the party that creates the negative externality. D. impose a tax on recipients of the negative externality.
Assume that the supply of coffee in a competitive market decreases. What will most likely happen to the equilibrium price and quantity of coffee?
a. Price will increase; quantity will increase b. Price will decrease; quantity will increase c. Price will increase; quantity will decrease d. Price will decrease; quantity will decrease