Suppose the production of a good results in negative externalities. If society produces the output consistent with the intersection of the demand curve and the marginal private cost curve, then
A. the socially optimal level of output will be produced.
B. society will incur a net social cost.
C. society will want more output produced, and producers will be willing to satisfy this desire at a price that society deems acceptable.
D. all of the above
E. There is not enough information to answer this question.
Answer: B
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The process of making the best of our limited resources by doing the things we are best at and hiring other people to do the things we are not particularly good at is called
A) absolute advantage. B) comparative advantage. C) specialization. D) protectionism.
As the manager of good A, which of the following would be of greatest concern (based on the regression results above)?
A) None of the factors below would be of concern. B) an impending recession C) pressure on you by your salespersons to lower the price so that they can boost their sales D) a price reduction by the makers of good B
An example of statistical discrimination would be:
A. assuming the food will be better at an Italian restaurant than a Chinese one in the Little Italy neighborhood of NYC. B. charging young drivers a higher premium than older drivers. C. charging homes near a lake higher premiums for flood insurance than those on a hill. D. All of these are examples of statistical discrimination.
In the past twenty years the economy's responsiveness to monetary policy has become
A) weaker and more stretched out. B) weaker and shorter. C) stronger and more stretched out. D) stronger and shorter.