When there is a negative externality, the competitive output is greater than the economically efficient output level
Indicate whether the statement is true or false
TRUE
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Refer to Table 2-20. What is Thailand's opportunity cost of producing one wristwatch?
A) 0.05 pounds of rice B) 20 pounds of rice C) 25 pounds of rice D) 60 pounds of rice
Which multilateral institution serves as the lender of last resort?
What will be an ideal response?
When social costs for using a scarce resource are included, then there is
A) a decrease in the production of the good. B) a negative externality. C) a decrease in the price of the good. D) a positive externality.
Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values {$14, $13, $12, $11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction costs and a competitive market. If there is a market maker in this market. What is the profit maximizing bid-ask spread per unit for a market maker?
a. $6 bid; $12 ask b. $7 bid; $11 ask c. $8 bid; $10 ask d. $9 bid; $9 ask