A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called
A) a public good.
B) a merit good.
C) an externality.
D) the free-rider problem.
Answer: C
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Differentiate between a solvent bank and an insolvent bank. Which of the two is likely to have a greater stockholders' equity?
What will be an ideal response?
Refer to Figure 17-2. Suppose the Fed used contractionary policy to push short-run equilibrium to point C. If the short-run equilibrium remained at point C long enough,
A) the economy would move back to point A. B) the economy would stay at point C in the long run. C) the short-run Phillips curve would shift down. D) the short-run Phillips curve would shift up.
According to the graph shown, if this economy were an autarky, consumers would get area:
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. A in consumer surplus.
B. ABC in consumer surplus.
C. ABCD in consumer surplus.
D. ABCDEFG in consumer surplus.
Which well-known economist from the past asserted that "the power of population is infinitely greater than the power in the earth to produce subsistence for man?"