Positive externalities arise when
A. a profitable firm is regulated.
B. tax rates are reduced.
C. an unprofitable firm is shut down.
D. production of a good generates benefits that spill over to third parties.
Answer: D
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Which of the following is TRUE?
A) Lotteries work best when a resource can serve just one user at a time in a sequence. B) A market price always allocates resources better than a command system. C) In the United States, how tax dollars are allocated among competing uses is an example of how resources are allocated by majority rule. D) Force has never played an important role in allocating scarce resources.
Probably the most significant factor explaining the drastic drop in the number of bank failures since the Great Depression has been
A) the creation of the FDIC. B) rapid economic growth since 1941. C) the employment of new procedures by the Federal Reserve. D) better bank management.
The profit-maximizing combination of resources in a perfectly competitive situation occurs at the point at which
A) MRP of labor = price of labor (wage rate). B) MRP of land = price of land (rental rate per unit). C) MRP of capital = price of capital (cost per unit of service). D) All of the above are correct.
The nominal interest rate on a loan with an annual inflation rate of ? and a real interest rate i is represented as:
a. i+?i? b. i+??i? c. i+??i? d. i+?-i?