It is true of externalities that they
A. are always detrimental.
B. are always beneficial.
C. arise when all costs, social and private, are included in production cost.
D. cause the price system to misallocate resources.
Answer: D
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Public goods are ________ in consumption
A) excludable but non-rival B) non-excludable and non-rival C) rival but non-excludable D) excludable and rival
If a company pays a dividend of $2 to be received one year from now, dividends are expected to grow at a rate of 3 percent per year for the indefinite future, and the interest rate is 4 percent, the price of the company's stock should be ________ per
share. A) $3.40 B) $28.57 C) $200.00 D) $340.00
A decrease in the price of capital relative to the price of labor is likely to result in a substitution of capital for labor in the production process
a. True b. False Indicate whether the statement is true or false
Firms believe that the current economic upturn will be long-lasting and have decided to hold a significant amount of excess labor. The government reports that the unemployment rate is 2.5%. The government has decided it needs to take very little action to stimulate the economy. In this situation the multiplier is likely to be
A. zero. B. small. C. large. D. negative.