The distribution of surplus received from a subsidy offered in a market where a positive externality is present depends on:
A. if those who are affected receive their true value of the externality.
B. where the government gets the money to pay for the subsidy.
C. how the subsidy is distributed among those affected by the externality.
D. None of these statements is true.
Answer: B
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In monopolistic competition, in the short run a firm maximizes its profit by selecting an output at which marginal cost equals
A) average total cost. B) marginal revenue. C) price. D) zero.
Another term for stocks is equity.
Answer the following statement true (T) or false (F)
In the global recession of 2007-2009, world trade declined because nations closed their markets to trading partners
Indicate whether the statement is true or false
If a bank has $1 million in demand deposits, $400,000 in reserves, and faces a 30 percent reserve requirement, the amount of money that a bank could initially create by loaning out their excess reserves is:
a. $600,000. b. $400,000. c. $300,000. d. $100,000.