When production creates external costs greater than external benefits, a market is:
A. producing a socially optimal quantity of the product.
B. allocating too few resources to production of the product.
C. allocating too many resources to production of the product.
D. not producing the product without government intervention.
Answer: C
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According to this Application, increases in unemployment insurance will ________ the total amount of employment
A) either increase or decrease B) have no effect on C) increase D) decrease
The intuition behind the budget constraint is that
A) more options are preferred to less. B) money is the root of all happiness. C) information is power. D) scarcity is avoidable with prosperity.
Unions contribute to
a. frictional unemployment but not the natural rate of unemployment. b. the natural rate of unemployment but not frictional unemployment. c. both frictional unemployment and the natural rate of unemployment. d. neither frictional unemployment nor the natural rate of unemployment.
To reduce labor surplus above the equilibrium union wage level, a union may do all of the following EXCEPT
A) lengthen apprenticeship period. B) assign jobs based on seniority. C) limit the number of new members accepted. D) encourage nonunion members to join the union.