When a positive externality exists,
A. external benefits are necessarily greater than private benefits.
B. social benefits are greater than private benefits.
C. social benefits are less than private benefits.
D. social benefits equal private benefits.
E. none of the above
Answer: B
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All homogeneous functions (of any degree) are homothetic but not all homothetic functions are homogeneous (of some degree).
Answer the following statement true (T) or false (F)
The natural rate of unemployment:
A. occurs at the economy's potential level of output. B. is zero. C. will cause a steady rise in the price level. D. All of these statements are true.
When a worker in the United States sends money to his family in Mexico, this transaction is recorded in the U.S. balance of payment as an:
A. outflow in the merchandise account. B. outflow in the net transfer account. C. inflow in the investment income account. D. inflow in the service account.
As the price of labor increases relative to the price of capital, the firm will move to a more labor-intensive production method to minimize costs
Indicate whether the statement is true or false