Which of the following statements is TRUE of external costs?
A) External costs should not be corrected since people will bear the costs whether they are corrected or not.
B) There are no good ways to correct for the external costs.
C) When external costs exist, the price of the good will be deceptively low leading to an overallocation of resources.
D) External costs should only be corrected for if the correction will not increase the market price.
Answer: C
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Which of the following best describes the short-run supply curve for an individual perfectly competitive firm?
A) It is the firm's marginal cost curve. B) It is the upward-sloping part of the firm's marginal cost curve. C) It is the vertical axis at prices less than minimum average variable cost and is the firm's marginal cost curve at prices above minimum average variable cost. D) It is the vertical axis at prices less than minimum average total cost and is the firm's marginal cost curve at prices above minimum average total cost.
For any given increase in spending that is not directly caused by an increase in income, the impact on equilibrium GDP is greater than the initial spending increase
Indicate whether the statement is true or false
Over the past 50 years, the average real wage for males who do not have a college diploma has ________
A) fallen B) risen C) remained essentially unchanged D) risen in economic contractions and fallen in economic expansions
If all conditions for a perfectly competitive market are met,
A) firms face sunk cost when entering the market. B) firms' demand curves are horizontal. C) the market demand curve is horizontal. D) the firms' demand curves are downward-sloping.