Which of the following statements about externality is INCORRECT?
A) Pollution of a chemical plant will create negative externalities to the residents living in the neighborhood.
B) Trees planted in the backyard of a house could create positive externalities to the pedestrians passing under.
C) Extra output sold by a firm that lowers the market price creates negative externalities to its rivals.
D) A single action may confer positive externalities on some people, but negative externalities on others.
C
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How does a sterilized intervention by the Fed in foreign exchange market differ from an unsterilized intervention?
What will be an ideal response?
In recent years, the Fed has generally set the discount rate
a. lower than the federal funds rate to help financially troubled banks get more solvent. b. higher than the interest rate on 30-year fixed-rate mortgage loans. c. higher than the federal funds rate for most banks. d. equal to the rate of inflation.
A change in the price of a competing product will shift demand.
a. true b. false
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. The expected value of the payoff is ________ for the first game and ________ for the second game.
A. $4.50; $5.75 B. $5.00; $4.50 C. $5.75; $5.25 D. $5.75; $4.50