[NeedAttention]
Exhibit 30-1
?
A. Curve X, because if there is a negative externality, external costs are associated with it: social costs = external costs + private costs, therefore the marginal social cost curve must lie above the marginal private cost curve.
B. Curve Y, because if there is a negative externality, negative external costs are associated with it: social costs = negative external costs + private costs, therefore the marginal social cost curve must lie below the marginal private cost curve.
C. Curve X, because if there is a negative externality, external benefits are associated with it: social costs = external benefits + private costs, therefore the marginal social cost curve must lie above the marginal private cost curve.
D. Curve Y, because if there is a negative externality, negative external benefits are associated with it: social costs = negative external benefits + private costs, therefore the marginal social cost curve must lie below the marginal private cost curve.
Answer: A
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If they behave as profit maximizing price takers, each produces 10 units and sells them at a price of 10 so that each firm makes zero economic profits. If they form a cartel, their inverse demand curve is A) Q = 30 - P. B) Q = 60 - 2P. C) P = 60 - 2Q. D) P = 30 - Q/2.
In the long run, a decrease in the money supply growth rate
a. increases inflation and shifts the short-run Phillips curve right. b. increases inflation and shifts the short-run Phillips curve left. c. decreases inflation and shifts the short-run Philips curve right. d. decreases inflation and shifts the short-run Phillips curve left.
Suppose Bob withdraws money from his savings account and deposits it into his checking account. What happens to M2?
A. It decreases. B. It increases. C. It stays the same. D. The effect is unknown.
Which of the following is likely to happen if the reserves held at the Fed by the private banks decrease?
A) Banks will make more loans. B) The M2 measure of money will decrease. C) The nominal interest rate will decrease. D) Labor demand will increase.