The social cost of a good or service includes the producer's private cost and all the external costs
Indicate whether the statement is true or false
TRUE
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Suppose the quality of televisions changes over time, but the quality change goes unmeasured for the purpose of computing the consumer price index. In which of the following instances would the bias resulting from the unmeasured quality change be most severe?
a. The quality of televisions deteriorates and televisions become more expensive relative to other goods. b. The quality of televisions improves and televisions become less expensive relative to other goods. c. The quality of televisions improves and televisions become more expensive relative to other goods. d. The quality of televisions deteriorates and the price of televisions relative to other prices remains unchanged.
Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then according to the Stolper-Samuelson Theorem, the incomes of the owners of ________ are likely to rise in Brazil after trade with Chile begins.
A) capital
B) labor
C) natural resources
D) It is impossible to determine which will be favored.
In the Keynesian model of an open economy, a temporary decrease in government purchases would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy.
A. lower; increase B. lower; decrease C. raise; increase D. raise; decrease
Determine if each of the goods below displays any of the following characteristics:
(i) rivalry (ii) nonrivalry (iii) excludability (iv) nonexcludability a. attending a Packers game at Lambeau Field b. online encyclopedia Wikipedia c. a shopping mall on Black Friday d. an online defensive driving class e. a Tesla Model S electric car