If society allows firms to freely pollute the environment, then which of the following is true?
a. Market equilibrium output will be equivalent to the efficient output level.
b. Market equilibrium output will be too low relative to the efficient output level.
c. Market equilibrium output will be too high relative to the efficient output level.
d. The efficient output level can be achieved by giving firms a subsidy for the pollution they generate.
c
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One important difference between the political process and the market process is that
A) the political process results in collective actions that maximize economic surplus, while the market process may lead to efficiency losses. B) the political process results in collective actions in which everyone is made better off, while the market process results in actions that favor some groups only. C) the political process results in collective actions in which not everyone is required to participate, while in the market process individuals are obliged to participate. D) the political process results in collective actions in which everyone is obliged to participate, while in the market process individuals are free to participate or not.
Exhibit 36-2 Stock High Low Close Net chg. Dasher 17.25 16.75 17.00 (A) Dancer 34.85 34.25 (B) +0.25 Prancer 56.50 55.90 56.00 (C) Vixen 65.90 (D) 64.75 -0.75 Refer to Exhibit 36-2. If the closing price of Prancer's stock on the previous day was $55.50, what value goes in blank (C)?
A. +0.75 B. -0.50 C. +0.50 D. +0.25 E. There is not enough information given to answer this question.
Which of the following correctly describes a wage-price spiral?
a. An increase in nominal wages causes inflation, and inflation causes workers to demand even higher wages in order to keep their real income constant. This cycle can repeat itself. b. An increase in real wages due to growth in worker productivity causes inflation, which in turn increases worker productivity. c. A decrease in prices causes workers to demand higher wages, which in turn puts additional downward pressure on prices. d. None of the above.
The purchasing power parity theory usually does not explain exchange rates at a particular point in time because of trade barriers, central bank intervention in exchange markets, and the fact that many products are not traded or are not comparable across countries
Indicate whether the statement is true or false