If the price of a normal good falls, the income effect will result in households buying ________ of the good and the substitution effect will result in households buying ________ of the good.
A. more; more
B. more; less
C. less; more
D. less; less
Answer: A
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A simultaneous increase in both the demand for computers and the supply of computers must increase
a. the number of computers bought and sold. b. the price of computers. c. both the equilibrium price and quantity of computers. d. the shortage of computers in the market.
An effluent fee is a
A) subsidy given to the producer of a positive externality. B) charge to a polluter that gives the right to discharge pollution into the air. C) fine imposed on a polluter for dumping illegal pollution. D) charge for a public good.
Which of these social sciences deals most with models of behavior rather than with thought processes?
A) psychology B) sociology C) psychiatry D) economics
The sum of internal and external costs is
A) externalities. B) social costs. C) internalities. D) private costs.