Which of the following statements is true?
A. A tax applied to an activity that generates a negative externality always brings about the socially optimal level of output.
B. A subsidy applied to an activity that generates a positive externality always brings about the socially optimal level of output.
C. a and b
D. none of the above
Answer: D
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If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible
A) explicit B) marginal C) opportunity D) implicit
Which of the following is FALSE regarding a monopsonist?
A) The monopsonist is the only buyer in a market. B) The monopsonist faces an upward sloping labor supply curve. C) The monopsonist faces an upward sloping labor demand curve. D) The monopsonist faces the entire market labor supply curve.
Which of the following statements is true about monopsony?
a. c and e. b. c, d, and e. c. Monopsonists exercise complete buying power. d. Monopsonists maximize profit by setting MRP = MFC. e. Monopsonists face the whole labor supply curve.
Suppose a bank has checkable deposits of $100,000 and the required reserve ratio is 20 percent. If the bank currently has $100,000 in reserves, it could expand the money supply by as much as:
a. $100,000. b. $400,000. c. $0. d. $20,000. e. $80,000.