When an external cost exists that is NOT taken into account in the production of a product,
A) the level of output is too low, and the supply curve should shift to the right to account for the externality.
B) the level of output is optimal, and there should be no change in the supply curve.
C) the price of the product is too high, and production should be expanded to lower the price.
D) the level of output is too high, and the supply curve should shift to the left to account for the externality.
D
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Suppose the equilibrium price of bottled water has risen from $1.00 per bottle to $2.00 per bottle and the equilibrium quantity has increased. These changes are a result of a ________ shift of the ________ curve for bottled water
A) rightward; demand B) rightward; supply C) leftward; supply D) leftward; demand
The Federal Reserve has just purchased bonds in the market, carrying out open market operations. In the short run in the Keynesian model, this would cause the foreign real interest rate to ________ and foreign output to ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Ninety percent of spending on education happens at the ______________ level.
a. federal b. federal and state c. state d. state and local
Lord Greystroke uses his limited income to purchase fruits and nuts; he is currently buying 10 pounds of fruits at a price of $2 per pound and 5 pounds of nuts at a price of $6 per pound. The last pound of fruits added 10 units to Lord Greystroke's total utility, while the last pound of nuts added 30 units. Lord Greystroke
A. should buy more nuts and less fruits because the last dollar spent on nuts added more to total utility than the last dollar spent on fruits. B. should buy more fruits and less nuts because the last pound of fruits cost less than the last pound of nuts. C. is making the utility-maximizing choice. D. should buy more nuts and less fruits because the last pound of nuts added more to total utility than the last pound of fruits. E. should buy more fruits and less nuts because the last dollar spent on fruits added more to total utility than the last dollar spent on nuts.