A positional externality:
A. results in under investment in performance enhancement.
B. arises in situations in which rewards depend on relative performance.
C. only occurs in sports.
D. arises in situations in which rewards depend on absolute performance.
Answer: B
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The minimum wage in 2008 was $6.55 cents until July 2008 when it was raised to $7.25. If the minimum wage in June was below the equilibrium wage and the increased wage in July was above the equilibrium wage, then
A) firms' producer surplus was greater in June than in July. B) unemployment was unaffected by the increase. C) the deadweight loss was greater in June than in July. D) employment of low-skilled workers increased in July.
The European subjugation or displacement of Native Americans from their lands
(a) was justified largely on the grounds that "might makes right." (b) was justified largely on the grounds of the "divine right of kings." (c) derived from the Christian belief of a right of conquest over non-Christian people. (d) was none of the above.
Offering product-specific services shifts the market demand for the product to the ________ and the market supply to the ________.
A) left; right B) left; left C) right; right D) right; left
Looking at the trade-off between output and a cleaner environment, low-income countries usually would choose what?
a. Less output to feed and house their citizens b. A cleaner environment even if it means the majority of their citizens staying poor c. More output to feed and house their citizens d. A cleaner environment for their citizens