Land on both sides of the border of Brazil and Venezuela has long been occupied by the Yanomamo people. These "fierce people" are the last Stone Age tribe left in South America. Following discovery of gold, approximately 45,000 garimperios (gold miners) invaded the Yanomamo territory. The mining process pollutes the rivers and scares away game, so traditional Yanomamo sources of food, are almost
impossible to find now. The Yanomamo are starving. Economists call this problem
a. the cost disease.
b. an externality.
c. specialization.
d. rent seeking.
b
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A country has several factories that emit sulfur dioxide. The main methods that the government can use to overcome the accompanying environment externalities include all of the following EXCEPT
A) cap-and-trade. B) mandating clean technology. C) subsidies. D) taxes.
A contractionary monetary policy can reduce real GDP if expectations are formed rationally and monetary policy is
A) combined with expansionary fiscal policy. B) carried out in total secrecy. C) publicly announced and credible. D) combined with contractionary fiscal policy.
An effective craft union acts as a monopoly
a. demander of labor. b. seller of labor. c. demander of capital. d. seller of capital.
In game theory, behavior that results in cooperation as long as the other players continue to cooperate, is referred to as
A) nice behavior. B) tit-for-tat strategic behavior. C) simple behavior. D) opportunistic behavior.