If a good has an external benefit, efficiency can be achieved by
A) leaving the market unregulated.
B) monopolizing the market.
C) offering a private subsidy on the good equal to the external benefit.
D) imposing a tax on the good equal to the external benefit.
C
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Each of the following took place in the latter half of the 1990s except
A. a falling rate of inflation. B. a rising stock market. C. an economic boom. D. a rising unemployment rate.
Given a downward-sloping aggregate demand curve, if short-run aggregate supply increases, real GDP must increase and nominal GDP must fall
a. True b. False Indicate whether the statement is true or false
If the Fed wishes to decrease the money supply, it could:
A. buy bonds. B. increase the reserve requirement. C. decrease the discount rate. D. print less currency.
Tombstones are produced in a monopolistic competitive market. One producer, Rolling Stones, sells 20 tombstones a week at a price of $500 each. Its average total cost is $600 . Its total variable cost is $2,000 . Its demand curve is downward sloping. Given this information, we know that
a. new firms will enter the market b. Rolling Stones loses $2,000 a week c. Rolling Stones makes an economic profit of $400 d. Rolling Stones makes an accounting profit of $100 e. Rolling Stones should increase production because with a downward-sloping demand curve, it will increase its economic profit