Which of the following describes a positive externality?
A) The government imposes a tax on cigarettes in order to discourage smoking among teenagers.
B) People who do not attend college still benefit from others who receive a college education.
C) John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale.
D) Mary volunteers to drive her neighbor's children to soccer practice.
B
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According to the random walk theory
A) today's stock price will be related to yesterday's stock price. B) successive prices of a stock are independent of each other. C) stock prices can easily be predicted for as much as 52 weeks into the future. D) stock prices rise and fall in predictable cycles that correspond with the overall business cycle.
Regulation that intends to improve the quality of service provided by carpenters will tend to increase the price of their services
a. True b. False
Economists speaking like scientists make
a. normative statements. b. prescriptive statements. c. claims about how the world is. d. claims about how the world should be.
Mrs. Smith operates a business in a competitive market. The current market price is $8.10 . At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25 . Mrs. Smith should
a. shut down her business in the short run but continue to operate in the long run. b. continue to operate in the short run but shut down in the long run. c. continue to operate in both the short run and long run. d. shut down in both the short run and long run.