If the social costs of an economic activity are $120 and the private costs are $75, then the external costs of the activity are ________, and market failure ________.
A. $45; occurs
B. $195; occurs
C. $195; does not occur
D. $45; does not occur
Answer: A
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If the price level rose in three consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would
A) decrease. B) remain the same. C) equal 20%. D) increase.
Refer to Figure 2-14. What is the opportunity cost of producing 1 popsicle in Greenland?
A) 2/3 of a snow cone B) 5/6 of a snow cone C) 1 1/5 snow cones D) 240 snow cones
According to efficient market theory, which of the following can best predict the stock price of a particular company tomorrow?
A) a finance professor who knows a lot of investment theory B) a stock trader who has traded stocks for more than 10 years C) that company's employee who has inside information about the company D) none of the above: Everyone has an equal chance of predicting future stock prices
In an oligopoly
A) there are many firms. B) there is one firm. C) there are few firms. D) firms openly collude.