Suppose the socially optimal output is 134 units of a good and the market output is 95 units of the good. A possible reason the market produces "too little" is that
A. marginal private benefits are less than marginal social benefits.
B. marginal private benefits are greater than marginal private costs.
C. marginal private benefits are greater than marginal social benefits.
D. marginal private costs are greater than marginal private benefits.
E. b and c
Answer: A
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A) bargaining B) contracting C) efficiency D) greed
From 2001 to 2005 there was a dramatic change in the price of houses. This change made people feel wealthier and shifted aggregate demand curve to the right. The price of houses must have
a) fallen. b) the price of houses has no effect on wealth and aggregate demand. c) risen. d) remained constant.
A price-taker faces a demand curve that is:
A. vertical at the market price. B. upward sloping. C. horizontal at the market price. D. downward sloping.
In the short run/long run, a strong currency goes with:
a. a low interest rate/a high interest rate. b. a high interest rate/a high interest rate. c. a high interest rate/a low interest rate. d. a low interest rate/a low interest rate.