Suppose the actions of the producers of a good generate an external benefit which results in the actual market price of $30 and market output of 220 units. How does this outcome compare to the efficient, ideal equilibrium?
a. The efficient price would higher than $30 while the efficient output would be less than 220 units.
b. The efficient price would be higher than $30 while the efficient output would be greater than 220 units.
c. The efficient price would be lower than $30 while the efficient output would be less than 220 units.
d. The efficient price would be lower than $30 while the efficient output would be greater than 220 units.
B
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The supply curve of U.S. dollars in the foreign exchange market is:
a. downward-sloping because it is negatively related to U.S. exports. b. downward-sloping because it is negatively related to U.S. imports. c. upward-sloping because it is positively related to U.S. exports. d. upward-sloping because it is positively related to U.S. imports. e. horizontal because it is unrelated to foreign demand for U.S. goods and services.
The economy will reach equilibrium in a simple economy only if saving is
a. greater than investment. b. less than investment. c. equal to investment. d. equal to disposable income.
If domestic residents of other countries purchase $600 billion of U.S. assets and U.S residents purchase $500 billion of foreign assets, then U.S. net capital outflow is
a. $100 billion and the U.S. has a trade surplus. b. $100 billion and the U.S has a trade deficit. c. -$100 billion and the U.S. has a trade surplus. d. -$100 billion and the U.S. has a trade deficit.
Which of the following are qualifications of the Coase Theorem?
a. technical transaction costs must remain low and be unaffected if liability assignment is reversed b. both parties must operate in a purely competitive market c. one party quickly makes an offer the other is just willing to accept only when the information regarding payoffs is complete, certain and known to both parties d. all of the above are correct e. only a and c