Externalities are created when parties not involved in an economic transaction are affected by it.
Answer the following statement true (T) or false (F)
True
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Perfectly competitive firms are said to be "small." Which of the following best describes this smallness?
A) The individual firm must have fewer than 10 employees. B) The individual firm faces a downward-sloping demand curve. C) The individual firm has assets of less than $2 million. D) The individual firm is unable to affect market price through its output decisions.
Roxanne and Eileen live in an apartment building with a laundry room in the basement. Roxanne does her laundry at home, spending $4 and 5 hours per week. Eileen sends her laundry out, spending $20 and 15 minutes per week transporting the laundry. On the basis of the information given, which one of the following must be true?
a. Roxanne earns more labor income than Eileen. b. Eileen earns more total income than Roxanne. c. Roxanne enjoys doing laundry; Eileen does not. d. Eileen has less laundry than Roxanne. e. Eileen and Roxanne attach different utilities to time spent doing laundry.
Economic growth is measured by the percentage change in: a. potential nominal GDP
b. structural unemployment. c. the rule of 72. d. potential real GDP (LRAS).
A decrease in U.S. tariffs on European goods, ceteris paribus, would ______.
a. make European goods more affordable to U.S. residents b. lead to a lower exchange rate for the euro c. make U.S. goods more affordable to European residents d. increase the income of U.S. residents