When market activity generates a negative externality, the level of output in the market equilibrium is lower than the socially optimal level
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following is likely to affect the position and shape of society’s production possibilities frontier?
A. Volume of physical resources B. Level of labor skills C. Level of technology D. Amount of factories on hand E. All of the responses are correct.
What would be a way for the Federal Reserve to stimulate a sluggish economy?
A) buy government bonds on the open market B) encourage the stock market C) print more money D) sell more government bonds
The figure below shows the retail demand for running shoes. If the distributor (the retailer) is a monopoly and the marginal cost of distributing the shoes is $20 per pair, the manufacturer's wholesale demand curve lies
A) $20 below the retail demand curve, D.
B) $20 below the retail marginal revenue curve, MR.
C) $20 above the retail demand curve, D.
D) $20 above the retail marginal revenue curve, MR.
Social Security is a pure transfer program because
A. the government subsidizes the medical bill of the poor. B. current payroll taxes are used to pay the eligible retirees. C. it transfers funds from current workers to the poor. D. the government transfers funds from middle-income workers to welfare recipients.