State and local governments subsidize college students with grants and low-interest loans. The loans and subsidies are examples of
A) positive externalities.
B) Coase subsidies.
C) Pigovian subsidies.
D) emission allowances.
Answer: C
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A fall in supply is illustrated by
a. a downward shift in the supply curve. b. moving the equilibrium point down and to the left along the supply curve. c. drawing the supply curve flatter. d. shifting the supply curve to the left.
When supply decreases and the supply curve shifts to the left, equilibrium price ________ and equilibrium quantity ________
A) increases; decreases B) decreases; increases C) decreases; decreases D) increases; increases
The production function is concave in labor because
A) the contribution to production of each additional unit of labor decreases. B) the marginal product of labor is increasing. C) the marginal product of capital is decreasing. D) the labor demand is downward sloping.
You expect to rent out a vacation home on Sanibel Island for $800 a month as an investment. Upkeep is estimated at $3,000 a year. If the current market interest rate is 5 percent, you are willing to pay __________ for the house
a. $132,000 b. $100,000 c. $160,000 d. $192,000 e. $800,000