In any case where there is a positive externality, forming a government agency to solve the problem rarely results in an efficient outcome.
Answer the following statement true (T) or false (F)
False
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If government purchases decreases by $1 million while net taxes are unchanged, then:
A. public saving increases. B. private saving increases. C. public saving decreases. D. public saving does not change.
Consumer surplus occurs whenever the consumer pays a price
a. equal to marginal revenue. b. less than the consumer is willing to pay. c. less than marginal cost. d. equal to or less than average total cost.
The universal-service requirement complicates postal service pricing
Indicate whether the statement is true or false
If people did not deposit their money in banks, banks would
a. not be affected because banks do not rely on deposits to make loans b. have unused excess reserves that earn them no interest c. be able to expand the money supply by more than the money multiplier indicates d. disappear because they would have no deposits and could make no loans e. not be able to find new borrowers thus restricting their banking activity