External costs are those costs:
A. that fall directly on an economic decision maker.
B. that fall indirectly on an economic decision maker.
C. that are imposed without compensation on someone other than the person who caused them.
D. that are both social costs and private costs.
C. that are imposed without compensation on someone other than the person who caused them.
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Refer to Figure 23-1. If the economy is at point L, what will happen?
A) Inventories have risen above their desired level, and firms decrease production. B) Inventories have risen above their desired level, and firms increase production. C) Inventories have fallen below their desired level, and firms increase production. D) Inventories have fallen below their desired level, and firms decrease production.
If people increase their expected rate of interest, the speculative demand for money curve will _____ and money supply will _____
a. shift downward, remain unchanged. b. shift upward; remain unchanged. c. not be affected; shifts upward. d. not be affected; not be affected.
The law of diminishing marginal utility applies to goods with negative income elasticities; it does not always apply for goods with positive income elasticities
a. True b. False
A tax places a wedge between the price buyers pay and the price sellers receive
a. True b. False Indicate whether the statement is true or false