________ than the economically efficient quantity of a good or service will be produced in private markets where there are ________
A) More; positive externalities
B) More; social benefits
C) Less; positive externalities
D) Less; social costs
C
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All industrialized countries have become “service economies” in recent decades. Explain the reasons behind this shift.
What will be an ideal response?
For each of the following pairs of products, discuss which of the two would be expected to be more price elastic and explain why.
i. water vs. diamonds ii. insulin vs. cough syrup iii. meat vs. filet mignon iv. gasoline right after a major hurricane vs. gasoline over that entire summer
How will an increase in federal government spending without an increase in taxes affect real GDP and the price level in the short run in a closed economy and in an open economy?
What will be an ideal response?
The Stolper-Samuelson Theorem predicts
A) the level of productivity in export industries. B) which factors are abundant. C) the income distribution effects of trade. D) which goods will be exported. E) the importance of intraindustry trade.