Economic theory states that the optimal depletion rate will
a. Imply the extraction of all of a resource now as long as interest rates are positive
b. Increase as the discount rate is raised
c. Decrease as the discount rate is raised
d. Always ignore benefits to future generations
e. Always create excessive pollution
Answer: b. Increase as the discount rate is raised
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An efficient way to get a tire manufacturer to produce the socially optimal output level is
A) to impose a tax to make the tire manufacturer bear the external cost it creates. B) for government to set a quota on the quantity of tires that it can produce. C) to grant a subsidy to enable the manufacturer to internalize the external costs of production. D) to assign property rights to the tire manufacturer.
As an individual consumes more of a good, the marginal utility of that good declines
a. True b. False Indicate whether the statement is true or false
Which organization officially tracks all business cycles in the U.S. economy?
a. Department of Commerce b. National Bureau of Economic Research c. Bureau of Economic Analysis d. Census Bureau
Prices tend to increase when there is a situation of shortage in a market
a. True b. False Indicate whether the statement is true or false