Suppose that the producers of copper are permitted to emit harmful pollutants, free of charge, into the air. How will the price and output of copper products in a competitive market compare with their values under conditions of ideal economic efficiency?
a. The price will be too high, and the output will be too large.
b. The price will be too low, and the output will be too large.
c. The price will be too low, and the output will be too small.
d. The price will be too high, and the output will be too small.
B
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Under a fixed exchange rate system, if an appreciation in the value of a country's currency develops, the monetary authorities must intervene by ________
A) selling foreign exchange B) buying and selling the domestic currency C) raising the foreign interest rate D) buying foreign exchange
In discussing trade, it is ____ that matters rather than ____.
A. absolute advantage; elastic advantage B. comparative advantage; absolute advantage C. entire advantage; comparative advantage D. elastic advantage; entire advantage E. declarative advantage; absolute advantage
Economists refer to the talents, training, and education of workers as:
A. human capital. B. average labor productivity. C. physical capital. D. labor supply.
Suppose a nation increases the quantity of a product it exports. To attract the labor resources needed to support the increased production, it must:
a. pay higher wages. b. lay off workers. c. borrow capital abroad. d. find new sites for production near population centers.