The market produces too much of a good with ______.
a. adverse selection
b. negative externalities
c. positive externalities
d. asymmetric information
b. negative externalities
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A decrease in the interest rate, other things being equal, causes a (an):
a. leftward shift of the demand curve for money. b. rightward shift of the demand curve for money. c. downward movement along the demand curve for money. d. upward movement along the demand curve for money.
Price Per YardQuantity supplied$15?$2520 Refer to the table, which shows part of the weekly supply schedule for fall leaf-raking in a certain neighborhood. According to the laws of economics, which of the following could be the missing number?
A. 30 B. 10 C. 20 D. More information is needed.
JoAnn considers cola and plain sparkling water to be good substitutes. Suppose the price of sugar, a key ingredient used to produce cola, falls. According to the substitution effect, which of the following is most likely to occur?
A. JoAnn will purchase less cola and more sparkling water. B. JoAnn will purchase more cola and less sparkling water. C. JoAnn will purchase more of all goods due to her higher real income. D. JoAnn's demand curve will decrease (shift in), causing her to purchase less cola.
For an incumbent, investing in plant and equipment that reduces marginal cost while raising total cost makes sense if
A) the incumbent's profit fro, producing the entry-deterring level of output after making the investment exceeds the profit the firm would earn if it didn't make the investment and entry occurred B) the incumbent's profit from producing the entry-deterring level of output after making the investment is positive C) the potential entrant cannot enter the market profitably after the incumbent makes the investment and produces the entry-deterring level of output D) the potential entrant would not enter the market anyway