Assume that price underestimates the value that society places on the flu vaccine. If firms produce where P = MC, firms will be producing
A. the socially efficient amount of flu vaccine.
B. more than the socially efficient amount of flu vaccine
C. so that consumer surplus is zero.
D. less than the socially efficient amount of flu vaccine.
Answer: D
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Historically, the key role in assisting countries that ran into financial difficulties was played by
A) Europe. B) Japan. C) the IMF. D) the United Nations.
The overall money supply would tend to increase if the Fed were to
A) increase the required reserve ratio. B) increase the discount rate. C) buy government bonds. D) exchange crisp dollar bills for worn and tattered dollar bills.
Currency stabilization policy is:
A. successful only if the government can identify the long-run equilibrium value of the exchange rate. B. successful only if the government does not attempt to affect market expectations. C. never successful. D. always successful.
When people speak of the labor force participation rate, they are actually talking about the percentage of
a. people not working but actively seeking work. b. people who are working. c. new entrants into the labor force. d. working-age people who are either working or seeking work.