A ________ occurs when an economic activity has a spillover cost that does not affect those directly engaged in the activity
A) positive externality
B) negative externality
C) gain in producer surplus
D) gain in consumer surplus
B
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An individual's demand curve
a. represents the various quantities that a consumer is willing to purchase of a good at various prices. b. is derived from an individual's indifference curve map. c. will shift if preferences, prices of other goods, or income change. d. all of the above.
The prisoner's dilemma is a game in which the gains from cooperation are smaller than the rewards from pursuing self-interest
a. True b. False Indicate whether the statement is true or false
If people have rational expectations, then they
a. are correct at least 50% of the time. b. do not make systematic and correctable errors in prediction. c. sometimes overestimate, but never underestimate, economic variables. d. revise their expectations upward when their predictions are too low and downward when they are too high.
If there are no interventions by finance ministers or control banks in the international market, then
A) the current account and the capital account must sum to zero. B) the current account will be greater than the financial market. C) the capital market will be greater than the current account. D) the capital market will equal the current account.