A rise in the price of Pepsi that causes a household to shift its purchasing pattern toward Coke and away from Pepsi is the ________ effect of a price change.
A. income
B. substitution
C. diminishing marginal utility
D. complementary
Answer: B
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Explain how positive externalities cause a wedge between private marginal costs and social marginal costs. Give an example of a positive externality and explain why it is, in fact, a positive externality. Draw a supply/demand diagram and add a social marginal cost curve that represents the presence of the positive externality. Explain the relationship between the equilibrium quantity and that which is socially efficient.
What will be an ideal response?
What is scarcity?
What will be an ideal response?
Some economists criticize the Lorenz curve because it
A) includes too many things in measuring income, such as food stamps, housing aid, and other government programs. B) does not account for the effect of age on a family's income. C) measures unreported income earned in the underground economy. D) uses after-tax income when pre-tax income is more appropriate.
From 1991-2000 . U.S. net capital outflow as a percent of GDP became a
a. larger positive number. b. smaller positive number. c. larger negative number. d. smaller negative number.