When a person smokes a cigarette in his car and throws the butt out of the window, this is a(n)
A) marginal cost.
B) external cost.
C) marginal personal benefit.
D) internal benefit.
Answer: B
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When production of a good results in an external cost, the unregulated competitive market equilibrium quantity is
A) the efficient level of output. B) greater than the efficient level of output. C) not zero but is less than the efficient level of output. D) unattainable. E) zero.
Public policy responses to monopolies:
A. aim to break up existing monopolies. B. prevent new monopolies from forming. C. ease the effect of monopoly power on consumers. D. All of these statements are true.
A bank's net worth is:
a. equal to assets plus liabilities b. sometimes called the owners' equity. c. equal to assets minus reserves. d. the same thing as net profits. e. the amount of interest charged by the bank for short-term loans.
How much additional money will be created if you deposit a $200 check into your bank, which holds a 10% reserve ratio?
A. $200 will be created since your checking account balance has increased by $200 B. $180 since the bank will keep 10% of your $200 check in reserves and lend the other 90% C. $2,000 since the money multiplier will be equal to 10 and reserves have increased by $200 D. No money will be created since the $200 check does not represent an increase in reserves