If all firms had to bear all the social costs of their actions, we should observe marginal cost curves
A) of all firms shifting up.
B) of some firms shifting up, of some others shifting down, and of the rest not shifting at all.
C) of all firms that had generated externalities shifting up while there would be no change for the rest of the firms.
D) of some firms shifting up and of the rest shifting down.
Answer: B
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The goals of bank asset management include
A) maximizing risk. B) minimizing liquidity. C) lending at high interest rates regardless of risk. D) purchasing securities with high returns and low risk.
Which of the following statements about barriers to entry is false?
A) They restrict entry into industries in which positive economic profits are being made. B) They are somewhat lessened by the existence of patents. C) They may be due to legal impediments such as licenses. D) They may be due to a single firm controlling access to a natural resource or production process.
That part of national income not spent on consumption is
a. saving b. investment c. delayed consumption d. induced consumption e. the MPC
Jerry has $50,000 in his savings account and the average new car price is $23,000. Does Jerry have a demand for a new car?
A) Yes, since Jerry can afford a new car. B) Not necessarily. Jerry has the ability to buy a new car, but we don't know if he also has the willingness to buy a new car. C) Yes, since Jerry's savings is more than double the average new car price. D) none of the above