Generally, negative externalities result in
A. too much of a good being produced.
B. the socially optimal output of a good being produced.
C. too little of a good being produced.
D. either a or c
E. any of the above
Answer: A
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When a game has more than one Nash equilibrium
a. players will choose the strategies which maximize total welfare. b. players are likely to choose the strategies which minimize total welfare. c. it is difficult to predict which of the equilibria will occur or whether it is stable. d. it is difficult to predict which of the equilibria will occur but once one is reached it is likely to remain stable.
If two goods, "x" and "y", are perfect substitutes, then which of the following best represents the utility function for the two goods?
A) U = x + y B) U = x ? y C) U = x2 + y2 D) Any of the above.
Identify the market structure characterized by many small firms selling somewhat different products.
A. Monopoly B. Monopolistic competition C. Perfect competition D. Duopoly
A difference between a proprietorship and a partnership is that
A) a proprietorship is easy to form while a partnership is hard to form. B) a proprietorship has only one owner while a partnership has only two owners. C) a partnership allows for specialization while a proprietorship does not. D) the profits in a proprietorship are taxed only once while in a partnership they are taxed twice.