When the government intervenes in markets with externalities, it does so in order to
a. increase production when negative externalities are present.
b. protect the interests of bystanders.
c. make certain all benefits are received by market participants.
d. reduce production when positive externalities are present.
b
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Refer to the scenario above. The opportunity cost of producing one pound of apples in Beta is:
A) 1/2 pounds of oranges. B) 15 pounds of oranges. C) 10 pounds of oranges. D) 2 pounds of oranges.
The nominal rate of interest is the difference between the real rate and the expected rate of inflation
a. True b. False Indicate whether the statement is true or false
When the Fed decreases the money supply, what will happen to nominal interest rates?
What will be an ideal response?
An automobile manufacturer voluntarily recalls certain models to fix a defective part at no cost to the owners. This action has the effect of
A) the lemon problem. B) a manufacturer's warranty. C) a market failure. D) none of the above.