Which of the following purported externalities in fact does not distort the allocation of resources? I. An individual's unwillingness to cut his or her own lawn in an otherwise immaculately kept neighborhood. II. Smoke produced by a new firm in an area which raises the costs of other firms. III. A new firm's bidding up skilled wages in an area, thereby raising costs of other firms. IV. An
individual's unwillingness to obtain job training, thereby lowering the total GNP. Possible choices:
a. I, III, and IV.
b. III and IV.
c. III only.
d. IV only.
b
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Discuss the impact of the restoration of convertibility in 1958
What will be an ideal response?
According to the "square-root rule" of the transactions demand for money, the demand for money would
A) vary inversely with the interest rate. B) be zero if there were no costs to switching between money and interest-earning assets. C) vary less than proportionately with income. D) All of the above are correct.
The purchase of voting stock by a competing firm is illegal in the United States
Indicate whether the statement is true or false
It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that
a. resources would be used more efficiently if the government produced the weapons. b. resources would be used more efficiently if private firms provided national defense. c. weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable. d. national defense is rival in consumption and excludable, but weapons are not rival in consumption and not excludable.