Markets often generate negative externalities because
a. there are too many participants in the marketplace
b. property rights are sometimes poorly defined
c. identifying pollution sources isn't easy
d. free riders are hard to control
e. social benefits have not been internalized
B
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The substitution effect of a change in the price of cauliflower is the portion of the change in the quantity of cauliflower demanded that can be attributed to the change in the price of a substitute vegetable such as asparagus
Indicate whether the statement is true or false
Investment spending, capital formation, and rapid technological progress are directly related
a. True b. False Indicate whether the statement is true or false
Which of the following resulted from the Smoot-Hawley trade bill of 1930?
a. The stock market began a steady recovery from the crash of October 1929. b. Many countries responded by imposing higher tariffs on American products, and the volume of international trade fell sharply. c. Imports decreased, while exports increased, resulting in an overall increase in GDP and tariff revenues. d. The unemployment rate, which had been rising, began to steadily decline as jobs were protected by the trade restrictions.
What happens if the price of a product is below the equilibrium price?
A. The buyers will stop purchasing a "cheap" product. B. The producer will lower the price to sell more product. C. There will be an excess demand for the product. D. There will be a surplus of the product.