Altering incentives so that people take account of the external effects of their actions
a. is called internalizing the externality.
b. can be done by imposing a corrective tax.
c. is the role of government in markets with externalities.
d. All of the above are correct.
d
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Countries with different initial levels of per capita income may gravitate to a similar level of per capita income. Economists call this phenomenon ________
A) convergence B) simulation C) gravitation D) depreciation
The economic principle that states that individuals or nations can gain by specializing in the production of goods that they produce cheaply and exchanging for other desired goods that they could only produce at a higher cost is
a. the law of absolute advantage. b. the law of comparative advantage. c. the law of production possibilities. d. the exchange maximum principle.
Saying that it takes twice as many dollars to buy one ticket for a concert than two tickets for a movie refers to the use of money as a
A) medium of exchange. B) unit of account. C) store of value. D) means of achieving the double coincidence of wants.
The factor of production called "land" can be defined as the:
A. earth and anything naturally occurring on or in it used to produce goods and services. B. fraction of total costs spent on rent, lease, or mortgage. C. earth and any structures on it that are used to produce goods and services. D. area of the earth exchanged in the real estate market by businesses.