"Private costs are borne by individuals while social costs are borne by society." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. Social costs are private costs plus external costs, and external costs are borne by people who are not part of the exchange. They are still borne by individuals though.
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When comparing the market price of an input in a market characterized by bilateral monopoly to a perfectly competitive price
A) the bilateral monopoly price is always higher than the competitive price. B) there is no difference; the bilateral monopoly price equals the competitive price. C) the bilateral monopoly price is always less than the competitive price. D) the bilateral monopoly price can be higher than, lower than, or equal to the competitive price.
The measure of income received by persons from all sources is known as
a. personal income. b. national income. c. gross domestic product. d. net national product.
Why did John Maynard Keynes declare that aggregate demand was "inherently unstable"?
a. "Investment decisions were often guided by unpredictable animal spirits of business expectations." b. "Aggregate demand was measured incorrectly for decades." c. "Aggregate demand is not affected by any government action." d. "An federal expansionary policy is not a proper tool for stimulating the economy."
Which of the following policies face difficult problems of timing?
A) Fiscal policy B) Monetary policy C) Both of the above. D) None of the above.