Oftentimes, the socially optimal quantity for a product that imposes external costs on the society is not zero, but something greater than zero. This is because completely eliminating the externality would involve:
A. A much greater marginal benefit than marginal cost
B. A much greater marginal cost than marginal benefit
C. Having shortages in the market
D. Having surpluses in the market
B. A much greater marginal cost than marginal benefit
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Easy monetary policy will ________ net exports as a result of a ________ currency.
A. increase; stronger B. decrease; stronger C. decrease; weaker D. increase; weaker
If gold becomes acceptable as a medium of exchange, the demand for gold will ________ and the demand for bonds will ________, everything else held constant
A) decrease; decrease B) decrease; increase C) increase; increase D) increase; decrease
Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, an increase in the price of shovels will result in
A) fewer shovels being purchased to produce the same number of trenches. B) more workers being hired to produce the same number of trenches. C) the firm wishing to produce more trenches. D) no change in the firm's input mix.
Price discrimination occurs when a monopolist charges
a. both c and d b. different prices to different buyers for different products c. different prices to different groups of buyers, based on differences in the cost of providing the commodity to the buyer d. different prices to different groups of buyers for reasons unrelated to the cost of providing the commodity to the buyer e. all buyers the same price for the same product