Consider two goods-one that generates external benefits and another that generates external costs. A competitive market economy would tend to produce:
a. too much of both goods, relative to the social optimum
b. too little of both goods, relative to the social optimum.
c. too much of the good that generates external benefits relative to the social optimum, and too little of the good that generates external costs.
d. too little of the good that generates external benefits relative to the social optimum, and too much of the good that generates external costs.
d
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If a firm's demand curve slopes downward, the firm's
a. marginal revenue will rise as price is reduced b. marginal revenue will generally be less than price c. total revenue will decline continuously as price is reduced d. marginal revenue will always be greater than its demand e. average revenue will increase continuously as output increases
Which of the following is an example of a cartel?
a. Advanced Micro Devices b. AREVA c. Organization of the Petroleum Exporting Countries d. Combat Observation Laser Teams e. Lloyds Banking Group
Which of the following would be considered an example of monetary policy?
A. Provision of additional cash to the banking system. B. A reduction in income tax rates. C. A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries. D. A decision by a developing country to reduce government control of the economy and to become more market-oriented.
If the aggregate demand curve shifts to the left and the aggregate supply curve shifts to the right, the result will be a
A. decrease in the level of output. B. decrease in the price level. C. higher price level. D. higher unemployment rate.