If education produces positive externalities and the government does not intervene in the market, we would expect
a. the market equilibrium price to be higher than the efficient equilibrium price
b. the market equilibrium quantity to be lower than the efficient equilibrium output level.
c. the market equilibrium quantity to be higher than the efficient equilibrium output level.
d. none of the above
b
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The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When 400 pounds of coffee are produced and consumed in Kaffenia each day, that is
A) more efficient than when 300 pounds are produced and consumed because more is always better than less. B) inefficient because the marginal social benefit exceeds the marginal social cost. C) inefficient because the marginal social cost of the 400th pound exceeds its marginal social benefit. D) inefficient because the opportunity cost of producing more coffee exceeds its marginal social benefit.
Suppose you purchase a bond with a coupon of $30 for $1025. You sell it one year later for $1050. What rate of return did you earn? Report a percentage with two decimal places
What will be an ideal response?
Active stabilization policy can be rationalized in the New Keynesian model because
A) it makes it possible to obtain zero inflation. B) the government knows best. C) it counteracts the influence of unions. D) it allows a faster return to economic efficiency.
Consumer sovereignty means that ______.
a. consumers vote with their dollars in a market economy b. governments have no power in determining which products will be made c. consumers have no obligation to pay taxes to the government d. governments must provide people with fundamental goods and services