Proponents of a command economy argue that it promotes:
a. efficiency. b. equity.
c. consumer sovereignty. d. economic growth.
b
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A consequence of a negative externality is that social costs __________ private costs, and the efficient level of output __________.
A. equal; does not require any type of government intervention B. are less than; requires the government to create a subsidy C. are greater than; requires the government to impose a tax D. are greater than; requires the government to create a subsidy E. are less than; requires the government to impose a tax
If an exhaustible resource is priced at marginal cost that remains constant over time, then
A) all owners of that resource earn rent. B) the price will stay constant over time. C) the percent price increase each year equals the rate of interest. D) the good is relatively scarce.
An inferior good is one for which demand increases as
a. price decreases b. price increases c. income increases d. income decreases e. the price of a related good decreases
According to strategic trade policy, international trade largely involves firms which:
a. enjoy monopolistic power in the domestic market. b. has a high initial cost of production. c. pursues economies of scale. d. experiences diseconomies of scale. e. generates adequate employment in the domestic economy.