Figure 4.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from
A) point a to point c. B) point c to point b. C) D2 to D0. D) D1 to D2.
C
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One of the problems with excessive debt is that
A) it worsens the central government's budget position by adding large debt service payments to other budget items. B) it reduces the quantity of resources available to invest in economic development. C) if debt service is substantial, schools, health clinics, roads, ports, other infrastructure, and social needs are less likely to be addressed. D) it can intensify and spread a crisis. E) All of the above.
Suppose a state discovered chemical compounds in their water. The source of these chemicals is the waste discharges of industrial plants in another state. This is an example of a(n):
a. market failure where the market price of the output of these industrial plants does not fully reflect the social cost of producing these goods. b. external cost imposed by the industrial plants of another state. c. externality where the marginal social costs of producing these industrial goods differ from the marginal private costs. d. all of these.
If a single household received all income, the Gini coefficient would
a. have a value of zero. b. be identical to the Lorenz distribution. c. have a value of 1. d. have a value of infinity.
The transmission mechanism is the effect of changes in monetary policy on the stock market
a. True b. False Indicate whether the statement is true or false