The substitution effect of an inferior good is positive.
a. true
b. false
b. false
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The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve. The marginal external cost when 100 billion kilowatt hours are produced is
A) 0¢ per kilowatt. B) 5¢ per kilowatt. C) 10¢ per kilowatt. D) 15¢ per kilowatt. E) 20¢ per kilowatt.
Trade diversion reduces worldwide efficiency, because:
a. production is diverted to the country with the comparative advantage. b. production is diverted from the country with the comparative advantage. c. unnecessary trade restrictions are created in the economies. d. consumption is diverted to the country having inadequate demand. e. the cost of transshipment of the goods increases thus raising their prices in the world market.
The ability of an individual to own and exercise control over scarce resources is called
a. market failure. b. property rights. c. externality. d. market power.
If the cost of producing a good rises for sellers, then how will this affect the market equilibrium for that good?
a. Price and quantity will both fall. b. Price will fall and quantity will rise. c. Price will rise and quantity will fall. d. Price and quantity will both rise.