The presence of negative externalities leads to a misallocation of societal resources because:
a. whenever external costs are imposed on outside parties, the good should not be produced at all
b. less of the good than is ideal for society is produced.
c. there are some costs associated with production that the producer fails to take into consideration.
d. the government always intervenes in markets when negative externalities are present, and the government is inherently inefficient.
c
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The speculative demand for money may not exist because
A) banks now pay interest on some types of checkable deposits. B) there are alternative riskless assets paying higher returns than the return on money. C) the transactions demand can be shown to depend on interest rates. D) government regulations have eliminated risk in the financial markets.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
A firm with explicit costs of $3,000,000, no implicit costs, and total revenue of $3,000,000 would have
A. zero economic profit. B. zero accounting profit. C. accounting profits equal to economic profits, in this case both zero. D. All of the choices are true of this firm.
Refer to the information provided in Table 13.4 below to answer the question(s) that follow. Table 13.4Price ($)Quantity20.00118.00216.00314.00412.00510.006 8.007Refer to Table 13.4. If a monopoly faces the demand schedule given in the table and has a constant marginal and average cost of $12 per unit of providing the product, then the monopoly maximizes its profits by charging ________ per unit and selling ________ units of output.
A. $10; 6 B. $16; 3 C. $12; 5 D. $14; 4