Externalities are effects of a transaction that ________ people who are not part of that transaction.
A. only hurt
B. only help
C. either help or hurt
D. leave unaffected
Answer: C
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Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth
What will be an ideal response?
If a firm finds itself at an output level where MR < MC, then the firm
A. should shut down, since it is losing money. B. should decrease output. C. should increase output. D. should raise the price of its product.
One reason demand curves slope downwards is
a. Marginal value increases with each purchase b. Marginal value declines with each purchase c. Total value declines with each purchase d. All of the above
The U.S. government does not allow toggle switches for power windows in automobiles. The National Highway Traffic Safety Administration found that the regulation will save about two children every three years and have negligible costs because the industry will have plenty of time to incorporate new switches into future vehicles. Evaluating this rule in terms of costs and benefits, an economist most likely would conclude that:
A. it is a bad decision because the chances of a child dying (less than one per year) are so small that they can be ignored. B. we cannot tell if it is a good decision without knowing the ages of the children who might be saved by the regulation. C. it fails because it should take effect immediately, not after four years. D. it is a good decision because the benefits exceed the costs.