An externality
a. results in an equilibrium that does not maximize the total benefits to society.
b. causes demand to exceed supply.
c. strengthens the role of the "invisible hand" in the marketplace.
d. affects buyers but not sellers.
a
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Most of the unemployment experienced during the Great Depression was
a. cyclical. b. structural. c. seasonal. d. functional.
Suppose the economy is currently experiencing 9% inflation per year. If the Fed wants to reduce inflation to 3% and the sacrifice ratio is 4, then how much annual output must be sacrificed in the transition?
a. 4% b. 8% c. 16% d. 24%
With a given plant size, an increase in output will NOT result in an increase in
A. average fixed cost. B. total cost. C. average variable cost. D. total fixed cost.
Using the midpoint method to calculate the price elasticity of demand eliminates the problem of computing:
A) total revenue when price falls and demand is elastic. B) total revenue when price falls and demand is inelastic. C) different elasticities, depending on whether price decreases or increases. D) different elasticities, because price and quantity are inversely related on the demand curve.