Each of the following provides incentives to reduce a negative externality except:
a. merger with affected firms.
b. subsidizing consumption of the good being produced.
c. bargaining among firms.
d. taxation of the externality.
b
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A tax credit given to first-time home buyers would result in a _____________ shift in the ______________ curve for housing, which would lead to the unintended result of a(n) _____________ in the price of housing.
A. leftward; supply; increase B. leftward; demand; decrease C. rightward; supply; decrease D. rightward; demand; increase E. none of the above
Why is information sometimes considered as a good?
In a competitive market, the price of a product
a. is determined by buyers, and the quantity of the product produced is determined by sellers. b. is determined by sellers, and the quantity of the product produced is determined by buyers. c. and the quantity of the product produced are both determined by sellers. d. None of the above is correct.
Answer the following questions true (T) or false (F)
1. If Gladys sells her 2003 Jeep Cherokee for $3,500 in 2018, the sale of her car contributes $3,500 to 2018 GDP. 2. The circular flow of income shows that GDP can be measured as the sum of wages, interest, rent, and profits received by households or total expenditures on goods and services by households, firms, government, and the rest of the world. 3. Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.