If the external costs of production are not taken into account, then production will
A) be less than socially desirable.
B) be more than socially desirable.
C) be the same since only prices are affected by externalities.
D) cease.
Ans: B) be more than socially desirable.
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Refer to Table 5.1. A risk-neutral individual making a decision solely on the basis of the above information would choose to major in
A) accounting. B) economics. C) English. D) political science. E) mathematics.
Which of the following statements is true about productive and allocative efficiency?
A. Realizing allocative efficiency implies that productive efficiency has been realized. B. Productive efficiency can only occur if there is also allocative efficiency. C. Society can achieve either productive efficiency or allocative efficiency, but not both simultaneously. D. Productive efficiency and allocative efficiency can only occur together; neither can occur without the other.
An increase in interest rates by the Fed based on a given and unchanged policy reaction function represents a ________ the aggregate demand curve, and higher interest rates resulting from an upward shift in the Fed's policy reaction function represents a ________ the aggregate demand curve.
A. movement up; shift left of B. movement up; shift right C. shift left of; movement up D. shift left of; shift right of
A machinery used in a factory is a(n) ________ good
A) club B) capital C) inferior D) public