Any allocation resulting from a mutually beneficial trade is efficient.
Answer the following statement true (T) or false (F)
False
Rationale: A trade can result in both people becoming better off but not all gains from trade having been exhausted; i.e. there are more mutually beneficial trades to be had.
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The extent of the decline in output associated with the imposition of an employment tax depends on the
A) slope of the labor supply curve. B) tax rate. C) wage rate. D) slope of the labor demand curve.
Suppose the production of a good results in negative externalities. If society produces the output consistent with the intersection of the demand curve and the marginal private cost curve, then
A. the socially optimal level of output will be produced. B. society will incur a net social cost. C. society will want more output produced, and producers will be willing to satisfy this desire at a price that society deems acceptable. D. all of the above E. There is not enough information to answer this question.
To offset the effect of a steep fall in net exports on the economy, the government might: a. increase government purchases. b. decrease government purchases. c. increase taxes
d. none of the above.
One conceptual problem in assigning assets to M1, M2, and so on, is
A. distinguishing money from “near monies.” B. the problem of measuring asset size. C. the need to agree on a unit of account. D. the different size of financial assets.