If the demand for green tea increases as income increases, green tea is a(n)
A. substitute good.
B. normal good.
C. complementary good.
D. inferior good.
Answer: B
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One disadvantage of international policy coordination is caused by
A) having to trust another country. B) internalizing international policy externalities. C) monetary unity. D) forced intervention in money markets.
Which of the following statements is false?
A. The list of stocks that are included in the Dow Jones Industrial Average changes from time to time, and is determined by the editors of the Wall Street Journal. B. The Dow Jones Industrial Average first appeared on the scene in 1896. C. When the Dow Jones Industrial Average was first computed, prudent investors bought bonds, not stocks. D. The Dow Jones Industrial Average is computed by summing the prices of the thirty stocks included in the average and dividing by 30.
Which of the following is NOT true of opportunity cost?
a. Opportunity costs are subjective because they depend upon how the decision-maker values his or her options. b. Opportunity costs are only the monetary costs of lost options. c. Opportunity costs are the highest-valued alternative sacrificed in order to choose an option. d. Only the decision-maker can determine his or her opportunity costs for any particular action.
Figure 16.1A firm that generates pollution is illustrated in Figure 16.1. The government has chosen to impose a pollution tax equal to P2. From the firm's point of view, the marginal benefit of abatement is:
A. avoiding the pollution tax imposed by the government. B. the positive publicity the firm will receive by having a "green" production plant. C. the reciprocal of the marginal cost of abatement. D. zero because abatement benefits the general public, not the firm.