If the economy relies entirely on the market mechanism to answer the WHAT, HOW, and FOR WHOM questions, it tends to
A. Overproduce goods that yield external benefits and overproduce those that generate external costs.
B. Underproduce goods that yield external benefits and underproduce those that generate external costs.
C. Overproduce goods that yield external benefits and underproduce those that generate external costs.
D. Underproduce goods that yield external benefits and overproduce those that generate external costs.
Answer: D
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If the demand for digital cameras increases when consumers' income rise, then digital cameras are
A) a normal good. B) an inferior good. C) a substitute good for video cameras. D) a complement to video cameras.
If one firm advertises and other firms in the market don't, then ______
A. the demand for the advertised good becomes more elastic B. the profit-maximizing quantity of the advertised good decreases be-cause total fixed costs increase C. the average cost of producing a small quantity of the advertised good rises but the average total cost of producing a large quantity might fall D. the economic profit made from the advertised good increases
If the coupon payment on a bond is $140 and the coupon rate is 4.5%, then what is the price value of the bond?
A. $2,800 B. $146 C. $254.40 D. $3,111 E. There is not enough information provided to answer this question.
Diversification
What will be an ideal response?