Assuming there are no externalities, if a firm produces an output level where the benefits to consumers ________ the cost to suppliers to produce it, then price is ________ marginal cost.
A. exceed; less than
B. equal; greater than
C. are less than; greater than
D. are less than; less than
Answer: D
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The above figure shows supply and demand curves for milk. If the government passes a $2 per gallon specific tax, the loss in consumer surplus will equal
A) b + c + f + g. B) f + g. C) b + f. D) c + g.
Which of the following is correct?
a. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures. b. Monetarists believe there is an indirect link between changes in a nation's money supply and changes in expenditures. c. Monetarists believe there is a direct link between changes in a nation's money supply and changes in expenditures. d. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures. e. Keynesians believe there is no short-term link between changes in a nation's money supply and changes in expenditures.
When U.S. farmers in the Southwest irrigate their land, salt in the ground soil leaks into the Colorado River. The Colorado River has become so salty that Mexican farmers further down the river cannot irrigate their own land and Mexican crops have been devastated. This situation constitutes a negative externality because:
When a depreciation in the nation's real effective exchange rate initially lowers the trade balance and then increases it, economists refer to the phenomenon as:
a. the K-curve effect. b. the J-curve effect. c. the real balances effect. d. the marginal propensity to import.