An externality can be a
A) cost or a benefit.
B) benefit but not a cost.
C) cost but not a benefit.
D) marginal cost but not a total cost.
A
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According to the Rybczynski theorem, if a country increases its endowment of capital and prices remain constant, then its output of both the capital and labor intensive goods will rise
Indicate whether the statement is true or false
Government antitrust laws were designed to
a. encourage the production of public goods b. prevent natural monopolies c. prevent collusion among firms d. regulate natural monopolies e. correct the outcomes of positive and negative externalities in private markets
Countries that persistently expand the supply of money at a rapid rate can expect to experience
a. high rates of inflation b. rapid economic growth. c. lower interest rates. d. low rates of unemployment.
A pollution tax would be preferable to a system of transferable permits when
a. The marginal costs of damages are steep and the marginal costs of pollution reduction are relatively stable b. The marginal costs of damages are steep and the marginal costs of pollution reduction are steep c. The marginal costs of damages are relatively stable and the marginal costs of pollution reduction are relatively stable d. The marginal costs of damages are relatively stable and the marginal costs of pollution reduction are steep e. The marginal costs of damages are elastic and the marginal costs of pollution reduction are also elastic