Which of the following is an example of internalizing an externality?
A) a paper mill that spends money removing the pollution it generated
B) a neighbor leaving lots of trash in his front yard
C) a student receives $15 for each bright question asked during lecture
D) Both A and C.
D
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Which of the following is true of perfect competition but is not true of monopolistic competition?
a. The firm faces a downward-sloping demand curve. b. The firm faces a downward-sloping marginal revenue curve. c. The firm will earn zero economic profit in the long run. d. The firm will produce at a point where price equals marginal cost.
A monthly growth rate of 0.5% is an annual growth rate of:
A. 6.50% B. 6.17% C. 5.00% D. 6.00%
Company X is a perfume manufacturer and one of its popular products involves rosewood. It is deeply concerned with the market price fluctuations of rosewood. To protect this, it enters into a contract which would allow the company to buy rosewood at a specific price at a given future date. This is an example of
A. speculation. B. profit maximization. C. hedging. D. investment.
Luigi is willing to lend Klaus $5,000 for one year at a nominal rate of interest of 7%. Both Luigi and Klaus expect the rate of inflation to be 2% in the next year. If the actual rate of inflation over the year was 1%, we can say ________.
A. Luigi is better off and Klaus is worse off B. Luigi is worse off and Klaus is better off C. Luigi and Klaus are both better off D. Luigi and Klaus are both worse off