Answer the following statement(s) true (T) or false (F)
1. Unsolicited emails are a major positive externality.
2. Negative externalities lead to overproduction.
3. Firms do not shoulder the full cost of their actions if there is a negative externality.
4. Positive externalities result in efficient output levels.
5. Pollution has no benefits.
1. False
2. True
3. True
4. False
5. False
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The "real" price of a good is known as
A) the absolute price of the good. B) the dollar price of the good since we use dollars in the United States. C) relative price of the good. D) the price actually paid for a good instead of the sticker price.
If taxpayers can enjoy mosquito abatement whether or not they pay for it and, therefore, they tend to understate their true valuation of the spraying, this is an example of
a. private goods b. the median-voter model c. an open-access good d. the free-rider problem e. irrational ignorance
Which of the following would be most likely to enhance the growth rate of an economy?
What will be an ideal response?