External costs are equal to the difference between:
A.) Social costs and private costs.
B.) Marginal benefits and marginal costs.
C.) Average benefits and average costs.
D.) Marginal social benefits and marginal social costs.
A.) Social costs and private costs.
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Use the above figure. Which graph depicts a normal good?
A) A B) B C) C D) D
Rent seeking
a. is the attempt to find apartments in a rent-controlled city b. only makes sense in a monopolistically competitive industry c. is a zero-sum game because the public's loss is the rent seeker's gain d. is the expenditure of resources to obtain favorable treatment from government e. occurs because of cyclical majority
Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:
a. decrease the demand for chicken creating a lower price and a smaller amount of chicken purchased in the market. b. decrease the supply of chicken creating a higher price and a smaller amount of chicken purchased in the market. c. increase the demand for chicken creating a higher price and a greater amount of chicken purchased in the market. d. increase the supply of chicken creating a lower price and a greater amount of chicken purchased in the market.
When adjusting nominal GDP for price changes, it is preferable to use the GDP deflator rather than the consumer price index because
a. the GDP deflator is calculated for a narrow market basket of goods, approximating those items included in our measure of consumption expenditures. b. the GDP deflator calculates changes in the prices of items that more closely approximate those included in GDP. c. the GDP deflator is always less than the consumer price index, and therefore, it is a more stable index. d. the GDP deflator is the sum of the consumer price index and the wholesale price index.