If private bargaining to resolve an externality is to result in an efficient outcome,
A. there must be direct regulation of externalities.
B. rights must be protected by liability rules.
C. the initial assignment of rights must be clear to both parties.
D. there must be tradable pollution rights.
Answer: C
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If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,
A) there will be excess demand. B) there will be excess supply. C) the curves will shift to make a new equilibrium at the regulated price. D) None of the above.
When a binding price ceiling is imposed on a market, a. price no longer serves as a rationing device
b. the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling. c. all potential buyers benefit. d. All of the above are correct.
Which country has had a higher growth rate than the U.S. over about the last 120 years?
a. India b. Mexico c. United Kingdom d. Pakistan
In terms of the world as a whole, imports must equal exports because
A. Every good exported by one country becomes an import for another country. B. The United Nations requires it. C. Most countries, other than the United States, have a balanced trade situation. D. It is part of international law.