One of the reasons why firms pollute the air is that
A. use of the air is not easily excludable.
B. use of the air is costless to society.
C. use of the air is excludable.
D. moral hazard creates incentives to pollute the air.
Answer: A
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A decrease in the nominal exchange rate, e, defined as the number of units of the foreign currency that one unit of the domestic currency will buy, indicates that the domestic currency has ________ relative to the foreign currency.
A. become undervalued B. become overvalued C. depreciated D. appreciated
When analyzing how money affects income, we are analyzing the way in which a
A. stock affects another stock. B. stock affects a flow. C. flow affects another flow. D. flow affects a stock.
In general, who will benefit as the result of a tariff? I. Domestic producers II. Domestic consumers III. The domestic government
A) I only B) II only C) both I and III D) both II and III E) All of the above are correct.
In Figure 26.1, consumer surplus under perfect competition is 
A. FABE. B. EBC. C. P2AC. D. FAC.