Assume that production of a good imposes external costs on others. The equilibrium price will be ____ and the equilibrium quantity ____ for efficient resource allocation
a. too high; too high.
b. too high; too low.
c. too low; too high.
d. too low, too low.
c
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A country facing a balance of payments deficit will change the pegged value of its currency; this is called a revaluation
Indicate whether the statement is true or false
In economics, choosing one activity means:
A. choosing not to take advantage of another opportunity. B. people always act rationally. C. people signal they only like that activity. D. that activity must be observable to be studied.
The country of Northland produced $1,000 billion of output in one year. The population of Northland was 50 million, of whom 30 million were employed. What was average labor productivity in Northland?
A. $20,000 B. $33,333 C. $33 D. $20
Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?
A) When all group members pay the premium, the problem of adverse selection is reduced.
B) The characteristics of a large group are likely to reflect those of the entire population.
C) When all group members pay the premium, the problem of moral hazard is reduced.
D) It is easier to accurately predict the number of claims for a group than for an individual.