The classic example of a detrimental externality is
a. education.
b. pollution.
c. discovery of an AIDS vaccine.
d. Mrs. Lewis' prize-winning rose garden.
b
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With fixed exchange rates, the adjustment to changes in international monetary conditions comes through
A) exchange rate changes. B) exchange rate changes and international money flows. C) international money flows. D) None of the above.
A perfectly competitive firm may earn economic profits in
a. only the short run. b. only the long run. c. the short run and the long run. d. neither the short run nor the long run.
Helga owns Viking, Inc., started with her $100,000 inheritance. Helga’s accountant informs her that her firm earned a profit of $100,000 last year, and that if she chooses to invest the money she can expect a 10 percent return. If Helga did not run Viking, she would not work. What were Helga’s economic profits last year?
A. Zero B. $100,000 C. $90,000 D. $95,000
Economic theories, or models, enable us to predict and to give reasonable explanations regarding economic variables
a. True b. False Indicate whether the statement is true or false