Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers, or buy new batteries). This is an example of:
A. private property abuse.
B. external costs.
C. a negative externality.
D. a positive externality.
Answer: D
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In Econland autonomous consumption equals 700, the marginal propensity to consume equals 0.80, net taxes are fixed at 50, investment is fixed at 100, government purchases are fixed at 100, and net exports are fixed at 40. Aggregate expenditure equals
A. 900 + 0.80Y. B. 940 + 0.80Y. C. 990 + 0.80Y. D. 990 + 0.20Y.
Suppose the yield on government bonds rises. This should cause __________ in the discount factor in the stock price valuation formula and __________ in stock prices
A) a fall; a rise B) a rise; a fall C) a fall; a fall D) no change; no change
What happens when you make a purchase using a credit card?
(A) The money is immediately deducted from your account. (B) The amount of the purchase is deducted from a prepaid account. (C) The credit card issuer pays the store. (D) The place where you made the purchase receives the money within 24 hours.
A firm would most likely use a large advertising campaign for which of the following products?
a. flour b. bread c. celery d. iron