The diamond/water paradox is only true in theory, but no real-world examples have yet to be discovered.
Answer the following statement true (T) or false (F)
False
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According to William Shepherd's examination of competitive trends in the U.S. economy, a dominant firm
a. is a pure monopoly b. is a firm with over half the market share and no close rival c. is one of four firms that together supply more than 60 percent of the market d. is a single firm that controls the entire market and can block entry e. is one of four firms that work together to block entry into the market
When the benefits of an activity are received by those who are not directly involved in it, _____
a. a negative externality exists b. the government is producing a free good c. resources are being used in their highest-valued activity d. the government has to compensate for the loss in social welfare e. a positive externality exists
If a nation decides to specialize and trade, which of the following situations could be expected to occur?
a) lower prices b) fewer domestic jobs c) decreased resource availability d) decreased dependence on other nations e) decreased quantity and quality of goods
Assume that an economy's spending multiplier is 4. If this economy is in equilibrium at $2,000 billion, then which one of the following actions will bring it to a full-employment equilibrium of $1,500 billion?
A. $500 billion spending cut. B. $500 billion spending increase. C. $125 billion spending cut. D. $125 billion spending increase.