If coal-burning electrical utility companies fully internalized pollution costs, then we could expect
A) an increase in electricity prices.
B) a decrease in electricity prices.
C) no change in electricity prices.
D) a greater use of coal to produce electricity.
Answer: A
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In economic theory, transaction costs refer to
A) fees charged by brokers, traders, or other agents rather than by principals. B) costs attributable to the operations of middlemen. C) costs of arranging and carrying out voluntary exchanges. D) costs of obtaining customers or of marketing a product. E) costs not borne by the persons creating them.
Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is greater than 1
This slope means that A) a change in x is associated with a bigger change in y. B) a change in x is associated with a smaller change in y. C) a change in x is associated with no change in y. D) a change in x is associated with an equal change in y.
The production possibilities frontier model shows that
A) if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. B) a market economy is more efficient in producing goods and services than is a centrally planned economy. C) economic growth can only be achieved by free market economies. D) if consumers decide to buy more of a product, its price will increase.
Adam Smith believed that the goal of economic activity is to amass wealth in the form of gold, and that this could best be accomplished through government carefully using tariffs and quotas to fashion favorable terms of trade with its trading partners
a. True b. False Indicate whether the statement is true or false