Which of the following policies addresses the problem posed by positive externalities?
A) a subsidy to the agent that generates the positive externality
B) a tax on the agent that generates the positive externality
C) limit the activity that generates the positive externality
D) a subsidy to the agents that benefit from the positive externality
A
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Assume a perfectly competitive firm is producing 300 units of output, P = $10, ATC of the 300th unit is $8, marginal cost of the 300th unit = $10, and AVC of the 300th unit = $6. Based on this information, the firm is:
A) earning an economic profit of $600. B) earning an economic profit of $1,200. C) incurring a loss of $600. D) incurring a loss of $1,200.
Which of the following is a possible solution to the adverse selection problem?
a. Screening b. Signaling c. All of the above d. None of the above
When the U.S. dollar depreciates against the yen, the yen becomes ________ expensive and the U.S. exchange rate ________
A) more; rises B) less; rises C) more; falls D) less; falls
According to the HO model,
A) everyone automatically gains from trade. B) the gainers from trade outnumber the losers from trade. C) the scarce factor necessarily gains from trade. D) None of the above.