For negotiations to eliminate an externality to be successful
A. one person must be willing to benefit by less than the cost of the externality.
B. one person must benefit by double the cost of the externality.
C. both parties must agree on a mutually beneficial trade.
D. both parties must have property rights.
Answer: C
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The short-run macro model
a. relies on the market-clearing assumption b. is used primarily for long-run analysis c. is used primarily for short-run analysis d. focuses on the supply of and demand for resources e. focuses on fluctuations in the financial markets to explain fluctuations in real GDP
If Real GDP is less than Natural Real GDP, then the (actual) unemployment rate is
A) less than the natural unemployment rate. B) equal to the natural unemployment rate. C) greater than the natural unemployment rate. D) less than or greater than the natural unemployment rate, but we cannot determine which one. E) b and d
Alissa is studying for her principles of economics exam. She tells her study partner that "Only a very small number of people ever get to become astronauts and go into space. Therefore space exploration is not a public good." Do you agree? Explain.
What will be an ideal response?
Why does a patent stimulate research?
A) Patents give firms time to do research. B) Patents give firms the opportunity to recover research costs and thus serve as a profit motive. C) Without patents, firms would not research as much. D) They don't.