If a person does NOT pay all costs associated with a particular resource-using activity, then
A. the social costs of the activity are greater than the private costs of the activity.
B. the full costs of the activity are the sum of private costs plus internal costs.
C. the external costs of the activity are greater than the internal costs of the activity.
D. the external costs of the activity are greater than the private costs of the activity.
Answer: A
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Assume that you have taken over management of a small concession stand on a local beach for the summer. Your main product is iced water, popular on hot days. You’ve been selling 400 cups per day at 50 cents each. The cups cost 5 cents each. One of your customers suggests that you cut the price to 40 cents to make more money. For the customer to be correct, how much must your sales increase?
What will be an ideal response?
The nominal interest rate is determined by:
A. the point where the supply of money meets the demand for money. B. the Fed. C. the Treasury. D. inflation.
The isoquant mapping for perfect complements in production is
A. a straight line. B. concave. C. L-shaped. D. a ray passing through the origin.
When people use recent information to gradually adjust their forecasts of inflation, they are said to have:
a. static expectations. b. adaptive expectations. c. rational expectations. d. spiraling expectations.