Costs exist because ______.
a. the government establishes price controls
b. goods and services are taxed and subsidized
c. trade is a system of voluntary exchange
d. resources are scarce and have competing uses
d. resources are scarce and have competing uses
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Pigouvian subsidization:
A. involves the use of taxes or fees to remedy negative externalities. B. involves the use of subsidies to remedy negative externalities. C. is a legal principle requiring a party who takes an action that harms others to compensate the affected parties for some or all of their losses. D. requires that victims of an externality pay a tax to the producers of the externality.
The "Big Mac Theory of Exchange Rates" tests the accuracy of purchasing power parity theory. In July 2015, The Economist reported that the average price of a Big Mac in the United States was $4.79
In Switzerland, the average price of a Big Mac at that time was 6.50 Swiss francs. If the exchange rate between the dollar and the Swiss franc was 0.93 Swiss francs per dollar, explain how it would be profitable to buy Big Macs in the United States instead of in Switzerland.
What is the distinction between expected wealth and expected utility?
What will be an ideal response?
If an assumption is made that a society is operating on its production possibilities curve, an outward shift of the curve implies
A. economic growth has occurred. B. the society is making more efficient use of its available resources. C. consumer demand has increased. D. the present value of capital resources has increased.