The government could offer a subsidy to offset a:
A. network externality.
B. positive externality.
C. negative externality.
D. A subsidy could offset any of these.
Answer: B
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Brian is running for state senator and if elected, pledges to improve economic growth. His plan for economic growth includes increasing spending on public education and providing tax incentives to encourage improved private education
His plan is likely to A) slow economic growth because it includes a provision for private education. B) have no effect on economic growth because property rights are not changed. C) speed economic growth as the quality of resources improve. D) fail because the provision for private education limits government involvement in education. E) have no effect on economic growth because government spending cannot affect the economic growth rate.
If the elasticity of supply of a good is zero, then its
A) supply curve is vertical. B) supply curve is horizontal. C) demand curve must be vertical. D) supply curve is positively sloped.
If marginal utility is zero, total utility is
A) falling. B) zero. C) at its maximum. D) negative.
Positive economics is an approach to economics that
A. analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe preferred courses of action. B. examines the role of government in the economy. C. seeks to understand behavior and the operation of systems while making judgments about their usefulness to society. D. seeks to understand behavior and the operation of systems without making judgments.