When there are externalities, economic efficiency can be achieved without government intervention
A) at no time.
B) when the externality affects many people and property rights are not well defined.
C) when the externality affects many people and property rights are well defined.
D) when the externality affects only a few parties and property rights are not well defined.
E) when the externality affects only a few parties and property rights are well defined.
E
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Assume a closed economy, that taxes are fixed, and the marginal propensity to consume is equal to 0.8. What is the government spending multiplier?
A) 10 B) 5 C) 4 D) 3
In effect, the U.S. does subsidize high-tech firms by subsidizing R&D. This is done through
A) the budget of the Department of Education. B) systematic protection through the levying of tariffs. C) systematic protection through the establishment of NTBs. D) relatively accelerated "depreciation" of R&D investment in the Federal tax codes. E) subsidies for high-tech firms.
When managers in oligopolistic firms make decisions that affect output or price, they must
A) also be sure they erect barriers to entry to prevent new entrants from affecting their plans. B) anticipate the reactions of their rivals and plan accordingly. C) register with the Antitrust Division of the Department of Justice. D) inform the regulators of their industry about their plans.
Because of scarcity, we attempt to utilize our resources as efficiently as possible
a. True b. False Indicate whether the statement is true or false