According to the textbook, social norms:
A. are a type of positional externality.
B. can help curtail positional arms races.
C. are never effective at limiting positional arms races.
D. are usually ignored.
Answer: B
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In an open economy in which only two goods are produced and possibly traded, we would find that
a. production occurs where the production possibility curve is tangent to a line with the slope equal to the ratio of the world relative prices. b. production occurs where an indifference curve is tangent to the production possibilities curve. c. consumption occurs where an indifference curve is tangent to the production possibilities curve. d. consumption occurs where the production possibilities curve is tangent to a line with a slope equal to the ratio of the world relative prices.
Partial factor taxes are levied on an input in only some of its uses.
A. True B. False C. Uncertain
Explain the Ricardian equivalence theorem
What will be an ideal response?
When a price floor is imposed above the equilibrium price of a commodity,
a. quantity demanded will be greater than quantity supplied for the good. b. the quantity demanded by consumers will be greater than at the equilibrium price. c. a shortage of the good will develop. d. a surplus of the good will develop.