Society is likely to over-allocate resources to produce goods that
A) are public goods.
B) are merit goods.
C) generate positive externalities.
D) generate negative externalities.
Answer: D
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A bank currently has $50 million in deposits, $6 million in cash in the vault, $4 million on deposit with the Fed, and $5 million in government securities. The reserve ratio is 20 percent. A new deposit is made of $1 million
What is the maximum size loan the bank can make once the check clears? A) $1 million B) $5.8 million C) $800,000 D) 0
For each of the following transactions, explain what happens to the merchandise trade balance, current account balance, and financial account balance in both the United States and Mexico. The exchange rate is 2 Mexican pesos per U.S. dollar
(a) A Mexican firm spends 4 million pesos to buy radiology equipment from a U.S. firm. (b) A U.S. firm buys 20,000 sombreros at 20 pesos each. (c) Mexican computer firms send 200 programmers to universities in the United States, paying tuition and expenses of $3000 each. (d) A Mexican entrepreneur gives 50,000 pesos to the United Way of San Antonio, Texas. (e) Mexican investors buy $10 million worth of 30-year U.S. Treasury bonds.
Which of the following is an example of a capital resource?
a. a bank loan b. a corporate bond c. a tractor used by a farmer d. a lawn tractor used by a household e. 100 acres of prime farmland
According to the matrix shown, how much will be produced if both firms collude?
This prisoner's dilemma game shows the payoffs associated with two firms, A and B, in an oligopoly and their choices to either collude with one another or not.
A. 50 million units
B. 65 million units
C. 70 million units
D. 85 million units