Which of the following statements is true of creative destruction?
A) Creative destruction is encouraged in economies with extractive institutions.
B) Creative destruction is a phenomenon that was mostly prevalent before the year 1800.
C) Creative destruction is generally bad for an economy.
D) Creative destruction creates losses for some economic agents and benefits for others.
D
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Economist A.C. Pigou argued that to deal with a negative externality in production, the government should impose a tax equal to the cost of the externality
What did Pigou believe should be done in the case of a positive externality in consumption? How would his recommendation impact the demand and market equilibrium for the product which is generating the positive externality?
The principle which states that as more and more units of a variable resource are added to a set of fixed resources, the resulting additions to output eventually become increasingly smaller, is the principle of
a. increasing production. b. functioning production. c. diminishing marginal returns. d. increasing returns to scale.
If velocity of money is constant; real growth in the output of the economy is +2.5%; and inflation is 2.0%; what is the growth rate of money?
What will be an ideal response?
A seller's reservation price is generally equal to:
A. the seller's marginal cost. B. the buyer's reservation price. C. the market price. D. the seller's average cost.