When a positive externality exists in a market, total surplus:
A. is decreased by deadweight loss compared to that same market without a negative externality.
B. is the same as a market without a negative externality.
C. is increased by deadweight gain compared to that same market without a negative externality.
D. is the same but re-distributed differently than if that same market did not have a negative externality.
A. is decreased by deadweight loss compared to that same market without a negative externality.
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If two goods have a cross elasticity of demand of -2, then when the price of one good increases, the demand curve of the other good
A) shifts rightward. B) shifts leftward. C) remains unchanged and the supply curve also remains unchanged. D) might shift rightward, leftward, or remain unchanged. E) remains unchanged but the supply curve shifts leftward.
Compared to workers in richer countries, workers in developing countries have
A. lower productivity and lower wages. B. higher productivity and higher wages. C. higher productivity but lower wages. D. the same productivity but lower wages.
Judgment by performance means that the competitiveness of a market is determined by:
A. the structure of the industry. B. technological considerations. C. the number of firms in the market. D. the actual behavior of firms in the market.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.