Refer to Figure 10.1. If Daisy does not contribute to the lighting, Bo should
A) contribute if Luke contributes.
B) not contribute only if Luke does not contribute.
C) not contribute regardless of what Luke decides to do.
D) contribute if Luke does not contribute.
C
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A shift from S1 to S2 reflects the change that happens when a negative externality is taken into account. A shift from D1 to D2 reflects the change that happens when a positive externality is taken into account.Refer to the above figures. If a positive externality that existed becomes corrected, price and quantity will become
A. P1 and Q1. B. P2 and Q2. C. P3 and Q3. D. P4 and Q4.
Suppose that you are a bank manager, and the Federal Reserve raises the required reserve ratio from 10% to 12%. What actions would you need to take?
A. You would have to reduce lines to make up for the necessary increase in reserves B. You would need to make loans to match the new reserve requirement C. You would have to charge less for your loans because rates are now at 12%
If the economy is in a recession, the Fed could:
A. sell bonds through open market operations to increase spending in the economy. B. increase the reserve requirement to increase confidence in the financial system. C. buy bonds through open market operations to increase spending in the economy. D. increase the discount rate so banks will increase their lending in the economy.
In order to maximize net benefits, the managerial control variable should be used up to the point where:
A. net marginal benefits equal zero. B. total costs equal total benefits. C. average costs equal marginal benefits. D. average benefits equal marginal costs.