An example of ________ is a power plant generating water pollution.
A. the free-rider problem
B. a negative production externality
C. a public good
D. a positive production externality
Answer: B
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The high salaries paid to sports superstars in the United States are determined by
a. government regulations. b. league regulations. c. joint decisions by the club owners. d. consumer demand.
Globalization can increase wage inequality in the United States if international competition is primarily in industries requiring ________ workers.
A. low-skilled B. many C. few D. highly-skilled
Which of the following circumstances is most likely to result from a competitive market?
a. Price controls are implemented. b. Existing products are improved. c. Production systems remain stagnant. d. No new products are introduced.
Calculate the user cost of capital of a machine that costs $5000 and depreciates at a rate of 25%, when the expected real interest rate is 5%.
A. $1500 B. $500 C. $150 D. $5000