The fact that positive externalities may exist in education is not enough to justify government involvement. To justify government involvement, it must be shown that _____
a. the effect of the externalities are large
b. the externalities are inframarginal
c. people do not internalize the externalities
d. education is an investment good
b
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Suppose the official unemployment rate is 10 percent. We can conclude without question that:
a. the same 10 percent of the people in the economy were out of work for the entire ear. b. one of every 10 people in the civilian labor force is currently unemployed. c. the same 10 percent of the people in the civilian labor force were out of work for the entire year. d. every person in the civilian labor force was out of work for 10 percent of the year. e. 10 percent of the people in the economy were out of work for 10 percent of the year.
People are likely to want to hold more money if the interest rate
a. increases making the opportunity cost of holding money rise. b. increases making the opportunity cost of holding money fall. c. decreases making the opportunity cost of holding money rise. d. decreases making the opportunity cost of holding money fall.
When demand falls and supply remains the same, equilibrium price _______ and equilibrium quantity ________.
A. falls; falls B. rises; rises C. falls; rises D. rises; falls
Related to the Economics in Practice on page 68: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the ________ of Baltimore newspapers to ________.
A. supply; increase B. supply; decrease C. quantity supplied; decrease D. quantity supplied; increase