By requiring car producers to install emission control devices on cars, the government forces these producers to internalize some of the external costs of auto pollution. This will lead to the equilibrium price of cars:
A. increasing and the quantity increasing.
B. decreasing and the quantity increasing.
C. decreasing and the quantity decreasing.
D. increasing and the quantity decreasing.
Answer: D
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Suppose a price floor is set by the government above the market equilibrium price. Which of the following will result?
a. There will be a surplus. b. The quantity demanded will exceed the quantity supplied. c. The demand curve will shift to the left. d. None of these.
If the spending multiplier is 8, then the marginal propensity to consume must be 7/8
a. True b. False Indicate whether the statement is true or false
Given the cost function C(Y) = 6Y2, what is the marginal cost?
A. 12Y B. 6Y C. Y2 D. 3Y
Suppose Jackie can buy either video games or Blu-rays. If the prices of both goods double, and Jackie's income also doubles, what will happen to Jackie's budget line?
A. It will shift out. B. It will shift in. C. It will not change. D. It will swivel so that the slope is twice as steep.