A demand curve:
a. has a positive slope.
b. illustrates the negative relationship between price and quantity demanded.
c. illustrates the positive relationship between price and quantity demanded.
d. is based on the assumption of a stable supply curve.
e. shifts about in a random fashion.
b
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An externality is internalized if
A. the person(s) or group that generated the externality incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear. B. people are made aware of it and realize that social benefits are less than private benefits (in the case of a positive externality) and that social costs are less than private costs (in the case of a negative externality). C. the person(s) or group that generated the externality do not incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear. D. b and c E. none of the above
Firms face downward sloping demand curves in
A) monopolies only. B) monopolies and oligopolies only. C) monopolies and oligopolies that collude only. D) all market structures except perfect competition.
On a graph, the private sector's demand for loanable funds curve is
a. upward sloping b. vertical c. horizontal d. downward sloping e. horizontal then upward sloping
Consider two individuals — Marquis and Serena — each of whom would like to wear sweaters and eat tasty food. The gains from trade between Marquis and Serena are most obvious in which of the following cases?
a. Marquis is very good at knitting sweaters and at cooking tasty food, but Serena's skills in both of these activities are very poor. b. Marquis and Serena both are very good at cooking tasty food, but neither has the necessary skills to knit a sweater. c. Marquis's cooking and knitting skills are very poor, and Serena's cooking and knitting skills are also very poor. d. Marquis's skills are such that he can produce only sweaters, and Serena's skills are such that she can produce only tasty food.