If the price index rises from 100 to 120, the purchasing power value of the dollar:
A. may either rise or fall.
B. will rise by one-sixth.
C. will fall by one-sixth.
D. will rise by 20 percent.
C. will fall by one-sixth.
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Assume that air pollution from a copper smelter imposes external costs on people who live near the smelter. If the victims of the pollution could not legally enforce the right of their property not to be damaged, the amount of pollution reduction
A) would be significantly less than if the owners of the smelter were legally liable for damages. B) would be less than the amount at which the marginal benefit of pollution reduction equaled the marginal cost. C) would be too small; the government would have to intervene to bring about an efficient outcome. D) would be the same as if it would be if the owners of the smelter were legally liable.
When the WTO met in Seattle to initiate a further move towards free international trade, thousands of activists met
A) in order to promote the WTO's goals of "Trade-not Aid." B) in order to laud the WTO policy orientation which would bust local monopolies and therefore help ordinary relatively poor consumers everywhere. C) in order to laud the WTO policy of disallowing government sweetheart deals, which typically meant that corrupt governments subsidized their in-laws' conglomerates on the backs of poor taxpayers. D) in order to support the WTO efforts of bringing about a universal shift of resources in poor countries to higher efficiency and productivity uses, which would raise the real incomes of everyone. E) in order to protest WTO free trade policies that they believed hurt workers.
Starting from long-run equilibrium, the long-run impact(s) of an increase in autonomous consumption, compared to the original equilibrium, is:
A. lower inflation and the same output. B. higher inflation and higher output. C. lower inflation and lower output. D. higher inflation and the same output.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point D to Point B, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A. initially increases, then decreases. B. increases. C. remains constant. D. decreases.