A positive externality will cause a market to produce:
a. more than the efficient equilibrium output level.
b. iless than the efficient equilibrium output level.
c. the efficient equilibrium output level
d. None of the above.
b
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For the Coase theorem to apply, all of the following conditions must be satisfied except
A. Liability rules must be established and enforced. B. The basic rights of the individuals must be clearly understood. C. There must be no impediments to bargaining. D. Only a few people can be involved.
Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?
A) guitars B) cellos C) both goods D) neither good
A positive economic statement is
a. something good or desirable b. a call for improvement c. a statement of opinion d. a statement of fact e. a suggestion for policy
The way it is typically drawn, what does the slope of the aggregate production function imply?
A) Diminishing marginal product of labor B) Diminishing marginal product of capital C) Increasing returns to scale D) Decreasing returns to scale