Externalities are unintended costs or benefits imposed on third parties. Who creates these externalities?
a. the government
b. the market
c. the third parties themselves
d. buyers create the costs, sellers create the benefits
e. the economic activity of others that affects third parties
E
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Refer to Table 4-9. An agricultural price floor is a price that the government guarantees farmers will receive for a particular crop. Suppose the federal government sets a price floor for corn at $12 per bushel
a. What is the amount of shortage or surplus in the corn market as result of the price floor? b. If the government agrees to purchase any surplus output at $12, how much will it cost the government? c. If the government buys all of the farmers' output at the floor price, how many bushels of corn will it have to purchase and how much will it cost the government? d. Suppose the government buys up all of the farmers' output at the floor price and then sells the output to consumers at whatever price it can get. Under this scheme, what is the price at which the government will be able to sell off all of the output it had purchased from farmers? What is the revenue received from the government's sale? e. In this problem we have considered two government schemes: (1 ) a price floor is established and the government purchases any excess output and (2 ) the government buys all the farmers' output at the floor price and resells at whatever price it can get. Which scheme will taxpayers prefer? f. Consider again the two schemes. Which scheme will the farmers prefer? g. Consider again the two schemes. Which scheme will corn buyers prefer?
Which statement is false?
A. During the Great Depression millions of working-class and middle-class people demanded welfare payments. B. Until the 1930s the prevalent theory of poverty was that the poor were lazy. C. The heritage of slavery theory explains most poverty in this country. D. None of these statements are false.
At the socially optimum equilibrium, net social welfare is at its minimum
a. True b. False Indicate whether the statement is true or false
If real interest rates in the United States are higher than those of our trading partners, what will tend to happen to the foreign exchange value of the dollar and the U.S. current account deficit or surplus?
a. The dollar will depreciate; the current account will move toward a deficit. b. The dollar will depreciate; the current account will move toward a surplus. c. The dollar will appreciate; the current account will move toward a deficit. d. The dollar will appreciate; the current account will move toward a surplus.