If the educational attainment of a nation's population increases, the economy's production possibilities curve shifts inward
a. True
b. False
Indicate whether the statement is true or false
False
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According to Pigovian analysis, competitive behavior will result in overproduction of a good when
a. firms' activities create external costs. b. people outside of market transactions benefit from those transactions. c. property rights have been clearly and unambiguously assigned. d. private and social marginal costs are identical.
Some environmentalists have criticized tradable emission allowances on the grounds that they give permit holders a license to pollute
Furthermore, environmentalists argue that those who sell their permits receive a monetary benefit from their contribution to polluting the environment. Use economic reasoning to evaluate this criticism.
If an economy experiences an increase in its capital stock, everything else constant, then at constant world prices, it will
A) produce more of the labor intensive good and less of the capital intensive good. B) produce more of both goods. C) produce the same amount of both goods. D) produce less of the labor intensive good and more of the capital intensive good.
Assuming an inflationary gap exists, classical economists believe that flexible wages will restore full employment
a. True b. False Indicate whether the statement is true or false