When a firm generates external benefits, a more efficient outcome would result if
a. the firm produced a larger output level.
b. the firm reduced its output level.
c. a tax were levied on the firm equal to the dollar amount of the externalities.
d. price were fixed below the firm's per-unit cost.
A
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The absence of the Southern economy's ability to earn foreign exchange and its markets severely impacted all non-local trade in the U.S. after the Civil War
Indicate whether the statement is true or false
The first term in an NPV calculation is usually
A) positive, because firms consider only positive returns. B) positive, because interest charges do not accrue until the second period. C) zero, because interest charges do not accrue until the second period. D) negative, because funds for the project have to be borrowed up front before it is begun. E) negative, because the cost of the project is immediate, but revenue streams from the project come later.
For markets to work well, there must be
a. market power. b. a central planner. c. property rights. d. abundant, not scarce, resources.
A decrease in price:
A. does not change quantity demanded if demand is elastic. B. does not cause a quantity effect when demand is perfectly inelastic. C. causes a decrease in total revenue due to the quantity effect. D. causes an increase in total revenue due to the price effect.