If the government overcorrected in a situation of external costs
a. More than the efficient amount of the good would end up being produced
b. Less than the efficient amount of the good would end up being produced.
c. It would result in a welfare cost in that market that was bigger than the initial welfare cost.
d. Both a and c are would result.
a
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When interest rates rise in the United States (with the price level fixed), the value of the dollar ________, domestic goods become ________ expensive, and net exports ________
A) falls; less; fall B) falls; more; rise C) rises; more; fall D) rises; less; fall
A contract may remain incomplete because the expected benefits of greater completeness do not cover the costs of drafting it
Indicate whether the statement is true or false
According to Keynes, which of the following will cause a change in the consumption component of aggregate demand?
a. Change in foreign demand b. Change in government spending c. Change in desire to save more or less d. Change in relative price increase of U.S. goods
A firm is using 500 units of capital and 200 units of labor to produce 10,000 units of output. Capital costs $100 per unit and labor $20 per unit. The last unit of capital added 50 units of output, while the last unit of labor added 20 units of output. The firm
A. is using the cost-minimizing combination of capital and labor. B. should use more of both inputs in equal proportions. C. could produce the same output at a lower cost by using less capital and more labor. D. could produce the same level of output at a lower cost by using more capital and less labor. E. should use less of both inputs in equal proportions.