Negative externalities lead markets to produce a smaller quantity of a good than is socially desirable, while positive externalities lead markets to produce a larger quantity of a good than is socially desirable
a. True
b. False
Indicate whether the statement is true or false
False
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The income-expenditure model is best used for short-run analysis of economic fluctuations
Indicate whether the statement is true or false
Sophia is tending to her home garden while awaiting recall from her seasonal part-time job. The Bureau of Labor Statistics would classify Sophia as
a. not in the labor force. b. employed. c. unemployed. d. employed as a household worker.
Barry was a mortgage originator from 2002 to 2007. He often had clients who had limited financial assets, but he nevertheless encouraged them to take out large mortgages he felt they probably could not afford. Briefly explain why Barry would have been motivated to make such financial transactions.
What will be an ideal response?
The alternative combinations of two goods that a consumer can purchase with a given money income is:
A. a demand curve. B. a budget line. C. a production possibilities curve. D. consumer equilibrium.