New developments in computer monitors have made flat panel LCDs cheaper and better than the older CRT models. Given that monitors can contain as much as 8 pounds of lead, disposing of the old monitors creates a:
A. negative externality.
B. limited liability.
C. positive externality.
D. neutral externality.
Answer: A
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The income elasticity of demand for restaurant meals is 1.61. So
A) if income increases by 16.1 percent, the quantity demanded of restaurant meals will increase by 10 percent. B) if income increases by 10 percent, the quantity demanded of restaurant meals will increase by 16.1 percent. C) restaurant meals are an income elastic normal good. D) Both answers B and C are correct.
Assuming wages are indexed to inflation, if prices rose by 1.4 percent this month and your last month's wage was $1,000, your wage this month would be $1,014
a. True b. False Indicate whether the statement is true or false
If the demand in a perfectly competitive market decreases, the price will:
A. temporarily increase. B. increase permanently. C. temporarily decrease. D. decrease permanently.
Suppose the state of Wyoming passes a law that increases the tax on cigarettes. As a result, smokers who live in Wyoming start purchasing their cigarettes in surrounding states. Which of the following principles does this best illustrate?
a. People respond to incentives. b. Rational people think at the margin. c. Trade can make everyone better off. d. Markets are usually a good way to organize economic activity.