When interest rates on treasury bills and other financial assets are low, the opportunity cost of holding money is _______, so the quantity of money demanded will be _______.
A. Low; low
B. Low; high
C. High; low
B. Low; high
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When the production of a good creates an external cost, in order for taxes to be effective in achieving the efficient allocation of resources, the tax must be set equal to the
A) marginal private cost. B) marginal external cost. C) marginal social cost. D) marginal benefit of polluting.
In cost-benefit analysis, a low discount rate tends to favor projects with relatively ____ lives
a. short b. long
Refer to the information provided in Table 6.1 below to answer the question(s) that follow. Table 6.1Number of Hamburgers per DayTotal UtilityMarginal Utility130?252?367?476?5?4Number ofSodas per DayTotal UtilityMarginal Utility120?235?347?457?5?7Refer to Table 6.1. The total utility of five sodas per day is
A. 35. B. 64. C. 92. D. indeterminate from this information.
Which of the following is NOT a reason why collusion may be hard to sustain?
A. Firms observe their rivals' prices only imperfectly. B. Marginal costs, and therefore agreed-upon prices, may differ among firms or products. C. Prices wars in practice may not conform to the predictions of the Bertrand model. D. The potential profits from collusion can be so high as to create an incentive not to undercut.