Which of the following statements is true?
A. When production of a good yields positive externalities but output is currently at the market level, then a change in output to the socially optimal level will certainly be for the worse.
B. When production of a good yields negative externalities but output is currently at the market level, then a change in output to the socially optimal level will cause benefits to increase by an amount greater than costs will increase.
C. When production of a good yields positive externalities but output is currently at the market level, then a change in output to the socially optimal level will cause benefits to increase by an amount less than costs will increase.
D. a, b, and c
E. none of the above
Answer: E
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The induced retirement effect
A. causes a decrease in savings because people retire earlier. B. causes a decrease in savings because people retire later. C. causes an increase in savings because people retire later. D. causes an increase in savings because people retire earlier.
Use the information in the table below.Total salesIndustry 1Firm 1$5.3mFirm 2$199,000Firm 3$2.6mFirm 4$850,000What percent of total sales does Firm 1 make up in Industry 1?
A. 89% B. 53% C. 59% D. 25%
During October and November 2008, gasoline prices were falling dramatically making travel by car less expensive but air travel prices were as high as ever
If travel by car is less expensive, and income remains the same, describe the substitution and income effects that occur for travelling by car. A) If travelling by car is a normal good, the substitution effect would cause an increase and the income effect would cause a decrease in travelling by car. B) If travelling by car is a normal good, both the substitution and income effects would be cause an increase in travelling by car. C) If travelling by car is a normal good, the substitution effect would cause a decrease and the income effect would cause an increase in travelling by car. D) If travelling by car is a normal good, both the substitution and income effects would cause a decrease in travelling by car.
What are the three ways economies are organized?
a. communism, socialism, free b. market, capitalism, mixed c. traditional, command, market d. traditional, market, mixed