Detrimental externalities like pollution are a shortcoming of the market mechanism. Do they occur in free market economies alone? Explain with examples
Even though the detrimental externalities are the shortcoming of market economies, free market economies do not have any monopoly over this. Even some centrally planned economies like China and former Soviet Union have many environmental disasters. China has some of the world's worst air pollution. Grave environmental problems also continue to plague Eastern Europe and the countries of the former Soviet Union.
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According to the permanent income hypothesis, consumption spending depends largely on ________
A) current income B) the savings rate C) a consumer's lifetime resources D) the level of current income plus the value of the assets owned by the household
According to economists, human activity is unresponsive to changes in costs
a. True b. False Indicate whether the statement is true or false
Which of the following would shift the aggregate demand curve to the left?
a. increases in government purchases, investment spending, autonomous consumption, taxes or the money supply b. decreases in government purchases, investment spending, autonomous consumption, or the money supply c. increases in government purchases, investment spending, autonomous consumption or the money supply d. decreases in government purchases, investment spending, autonomous consumption, taxes or an increase in the money supply e. only increases in government purchases
Raiman's Shoe Repair also produces custom-made shoes. When Mr. Raiman produces 12 pair a week, the MC of the twelfth pair is $84, and the MR of that unit is $70 . What would you advise Mr. Raiman to do?
a. shut down b. produce more custom-made shoes c. stay at 12 pairs a week d. produce fewer custom-made shoes e. decrease price