An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society
a. True
b. False
Indicate whether the statement is true or false
False
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The new growth theory asserts that profits are
A) temporary, because the discoveries that lead to profits are eventually used by all. B) an illusion, since costs are never fully covered. C) permanent, because physical activities can be replicated. D) not an essential component determining whether the economy grows or not. E) permanent, because they are derived from discoveries.
Because smoking causes illness and disability to smokers, society must maintain more health-service capacity than it would need in the absence of smoking. Since the cost of maintaining this capacity is covered to a substantial degree by health insurance, even nonsmokers must pay higher premiums. Also, smokers hurt nonsmokers as a result of "passive smoke." The Rand Corporation estimates these
costs to be 29 cents per pack of cigarettes. Cigarette taxes average 37 cents per pack. Based on the economist's definition of efficiency, it follows that a. cigarette taxes are too high, and cigarette production is lower than the efficient amount. b. cigarette taxes should be increased until external costs are zero. c. since the tax exceeds the marginal cost, we have a better than efficient outcome. d. we are overconsuming cigarettes.
Which of the following is an asset of a bank and a liability for its customers?
a. deposits of its customers and loans to its customers b. deposits of its customers but not loans to its customers c. loans to its customers but not the deposits of its customers d. neither the deposits of its customers nor the loans to its customers
Airlines that charge higher prices for seats in the first class cabin are:
A. not price discriminating because the product is not the same. B. perfect price discriminators. C. price discriminating because all passengers on the plane are traveling the same route. D. using the hurdle method of price discrimination.