When a good causes positive external benefits to accrue to third parties, an unfettered market will
A. eliminate such goods.
B. under-allocate resources to the good causing the benefit.
C. over-allocate resources to the good causing the benefit.
D. cause the equilibrium quantity, established before the benefit is taken into account, to be produced more efficiently.
Answer: B
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Economists have noted that businesses of a certain type tend to congregate geographically, attracting workers with skills in those fields. This, in turn, lures more firms seeking employees with those skills
Some examples include commercial banking, software development, and the automobile industry. What mechanism is at work here? Briefly explain how the mechanism works to the advantage of employers and employees.
For a given technology, a higher capital stock will decrease labor productivity
a. True b. False Indicate whether the statement is true or false
Use the above table. What percentage of income is received by the poorest 60% of the population?
A. 44.44 percent B. 27.78 percent C. 33.33 percent D. 55.56 percent
Economists spend much of their time
A) describing how choices are made and analyzing the results of those choices. B) arguing that optimal decisions are rarely made at the margin. C) using normative analysis to develop economic models. D) telling businesses what goods and services to produce and how to produce them.