An external cost is created when you
A) graduate from college.
B) buy flowers for your mother on Mother's Day.
C) litter on the side of the road.
D) buy a sandwich for lunch.
Answer: C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
A rightward shift in the demand curve for tennis balls could be caused by
A) a fall in the price of tennis balls. B) a fall in the price of tennis rackets. C) a rise in the price of tennis lessons. D) a fall in income, assuming tennis balls are a normal good.
Which statement is false?
A. The main liberal theories of poverty are employment discrimination, black male joblessness, and the inadequacy of human capital. B. William Julius Wilson sees racism and technological change as leading causes of black poverty. C. Barbara Ehrenreich and Frances Fox Piven call for a large government jobs program to wipe out poverty. D. None of these statements are false.
If a good's price increases by 2 percent, then its quantity supplied increases by more than 2 percent. This means
A. supply is inelastic. B. supply is elastic. C. supply is unit-elastic. D. the good has good substitutes.