In the presence of positive externalities, a market will charge ________ and produce ________.
A. the correct amount; too little
B. too little; too little
C. the correct amount; the correct amount
D. too much; the correct amount
Answer: B
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Differentiate between principal and time value of money. John invests $100 in a bank for a year. At the end of the year he receives $125. What is the principal and time value of money in this case?
What will be an ideal response?
If the real wage rate is such that the quantity of labor supplied by workers is less than the quantity of labor demanded by firms
A) the economy is at full employment. B) there is a shortage of labor. C) the real wage rate will fall to restore equilibrium. D) actual real GDP equals potential GDP because firms make the decision about how many workers to hire.
The interest-rate-based monetary policy transmission mechanism emphasizes the
A) indirect effect of a change in the money supply that operates via a change in total planned expenditures generated by a change in the interest rate. B) direct effect of a change in the money supply that operates via a change in total planned production generated by a change in the price level. C) direct effect of a change in the money supply that operates via a change in total planned expenditures generated by a change in the interest rate. D) indirect effect of a change in the money supply that operates via a change in total planned production generated by a change in the price level.
The slope of an indifference curve at all points reflects
a. the terms by which the consumer can trade off goods in the market. b. the relative prices of the two goods. c. the willingness of the consumer to trade one good for another. d. consumer income relative to the price of a good. e. the relative price ratio of the two goods.