In the presence of positive externalities, a free market will choose a price which is too ____ and produce an output which is too ____ compared with the social optimum
a. high; low
b. low; low
c. high; high
d. low; high
e. marginal; inequitable
b
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Which of the following is a predictable impact of the Patient Protection and Affordable Care Act?
a. A reduction in the prices of health care services. b. A reduction in total expenditures on health care. c. An increase in the number of part-time employees relative to full-time workers. d. A lower overall rate of unemployment.
An import quota
A) is a price ceiling imposed on an imported good. B) is a price floor imposed on an imported good. C) is a supply restriction limiting the quantity of a good that can be imported. D) is a legislative requirement stating that firms which import some of their merchandise must hire a certain number of immigrant workers.
Since the early 1990s, the Fed has conducted monetary policy by setting a target for the
A) level of borrowed reserves. B) monetary base. C) federal funds rate. D) inflation rate.
On the graph above, consider a point A on the aggregate supply curve and above the aggregate demand curve. At this point, ________
A) quantity demanded equals output, but the inflation rate will fall, so output will rise B) quantity demanded is greater than quantity supplied, so the inflation rate will rise C) output is greater than the quantity demanded, so output will fall D) the aggregate demand curve will shift to the right until quantity demanded is equal to quantity supplied E) none of the above