A market in which there are neither external benefits nor external costs is:
A. efficient.
B. inefficient.
C. efficient and equitable.
D. impossible.
Answer: A
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Changes in which of the following shifts the aggregate supply curve? i. the price level ii. the money wage rate iii. potential GDP
A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
The goal of programs such as government-subsidized housing, food stamps, and Medicaid are to:
A. spur economic growth. B. redistribute wealth from the rich to the poor. C. reduce the time people spend in transient poverty. D. None of these is true.
The oversimplified formula for the multiplier is misleading because it ignores the effects of
A. price-level changes. B. the foreign sector. C. variable taxes. D. All of the above are correct.
Suppose that three consumers are in the market for good X. Consumer 1's (inverse) demand is PX = 20 ? QX; Consumer 2's (inverse) demand is PX = 20 ? 2QX; and Consumer 3's (inverse) demand is PX = 20 ? 4QX. When PX = $10, the market will demand:
A. 17.5 units and the inverse market demand curve is PX = 20 ? 0.5714QX. B. 17.5 units and the inverse market demand curve is PX = 60 ? 7QX. C. ?30 units and the inverse market demand curve is PX = 60 ? 7QX. D. None of the statements is correct.