Which of the following is an example of detrimental externality?
A. A trailer’s entry onto an overcrowded road that delays the movement of other vehicles.
B. Fall in demand for gasoline in the United States softens the price of gasoline in the global market.
C. Government investment in energy generation from nonconventional sources.
D. Society devotes huge quantity of its scarce resources for vital innovative activity.
Answer: A
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The factors of production include all goods and services produced in an economy.
Answer the following statement true (T) or false (F)
Use the following graph to answer the next question.
In the diagram, Qf is the full-employment output. If the economy's present aggregate demand curve is AD2,
A. the most appropriate fiscal policy is a reduction in government purchases or an increase of taxes. B. the most appropriate fiscal policy is an increase in government purchases or a reduction of taxes. C. the government should undertake neither an expansionary nor a contractionary fiscal policy. D. the economy is achieving its maximum possible output.
Profit-maximizing monopolists choose a level of output such that: a. average total cost is minimized
b. price equals marginal revenue but exceeds average variable cost. c. price equals marginal cost but exceeds average variable cost. d. marginal revenue equals marginal cost.
A transfer payment is
a. any non monetary transaction. b. payment for an import. c. payment for land. d. a payment of money in return for which no current goods or services are produced.