Which of the following statements reflects a situation in which there are external costs?
A. Suzanne pays for a professional fireworks show for her family. Her neighbors also enjoy the show.
B. Suzanne dumps her household garbage around the corner of the street.
C. Suzanne invites her neighbors to a party on her birthday.
D. Suzanne paints her house and landscapes her yard. Her newly beautified house and yard help her neighbors to sell their house for more than the asking price.
Answer: B
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An example of a nontradable good is:
A. insurance services. B. fresh pizza. C. a double-decker bus tour of London. D. All of these would be considered a nontradable good.
Generic drugs enter the pharmaceutical drug market once
a. the ingredients to the name brand drug have been discovered. b. 10 years have passed. c. they are patented. d. the patent on the name brand drug expires.
Which of the following events prompted the birth of market monetarism?
A) the Great Depression B) the Great Recession C) the 1907 Bankers' Panic D) the establishment of the European Union
Which of the following is most consistent with the basic postulate of economics: changes in incentives exert a predictable impact on human behavior?
a. Farmers produce fewer bushels of wheat in response to an increase in the price of wheat. b. People will buy more milk at a price of $3 per gallon than at $2 per gallon. c. People will buy less gas if the price of gas increases by $0.50 per gallon. d. People will consume more beef if the price increases from $1 to $2 per pound.