A firm dumps dioxin in a river, thereby severely polluting the river. The cost of the water pollution is i. zero for the firm. ii. an external cost. iii. part of the marginal social cost
A) i only
B) ii only
C) iii only
D) ii and iii
E) i, ii, and iii
E
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The natural rate of unemployment will not change following an increase in ________ unemployment
A) frictional B) cyclical C) structural D) all of the above
A normal rate of return on investment is equal to
A) accounting profit minus economic profit. B) the opportunity cost of capital plus any other implicit costs. C) accounting profit plus economic profit. D) total revenue plus total accounting profit
The long-run aggregate supply curve represents the level of output possible if the economy:
A. is operating at full capacity. B. is operating at an unemployment rate of zero. C. has a zero inflation rate. D. has no structural unemployment.
Which of the following is not true about moral hazard?
A. It increases the difficulty of operating private insurance markets. B. It increases the difficulty of operating public insurance markets. C. It is the tendency of people to change behavior when insured. D. It is the tendency of people with higher risks to buy more insurance.