A result of a positive externality in the production of a good is that
A. the price system will over-allocate resources to the production of that good or service.
B. the market demand will be too high.
C. the price system will under-allocate resources to the production of that good or service.
D. the market supply will be too high.
Answer: C
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The value and cost of goods are easiest to determine when the goods are
a. common resources. b. public goods. c. club goods. d. private goods.
In Exhibit 3-15, if the price moves from $2.00 to $1.00, unsold inventories will:
a. fall, putting upward pressure on price. b. fall, putting less pressure on price. c. rise, putting less pressure on price. d. rise, putting upward pressure on price.
When actual output exceeds potential output, _____
Fill in the blank(s) with the appropriate word(s).
The text notes that many firms that use animals in production or advertising adopt the animal treatment standards of the American Society for Prevention of Cruelty to Animals. Why do companies adopt a professional group's standard of behavior?
What will be an ideal response?