Firms that emit toxins into the air:
A. underproduce because the private cost of production exceeds the social cost.
B. overproduce because the social cost of production exceeds the private cost.
C. produce the same as nonpolluting firms.
D. produce at the socially optimal amount.
Answer: B
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In 1979, when the Fed was deciding how aggressively to fight inflation, the typical estimate of the sacrifice ratio was
a. 1. b. 5. c. 7. d. 10.
The capital account balance is equal to the negative of
A. Trade balance + unilateral transfers + net investment income. B. Unilateral transfers + exports + imports. C. Current account balance + exports + unilateral transfers. D. Trade balance + current account balance + services balance.
An increase in planned investment causes
A. output to increase. B. output to decrease by an amount equal to the decrease in investment. C. output to decrease, but by a larger amount than the decrease in investment. D. output to decrease, but by a smaller amount than the decrease in investment.
Suppose that the U.S. dollar (USD) and Singapore dollar (SGD) exchange rate is USD 1.00 for SGD 1.80. Then a Singaporean coffee maker priced at SGD 90 dollars would cost an American consumer how many U.S. dollars?
A. USD 40 B. USD 50 C. USD 60 D. USD 70