If a nation protects an industry because it believes that there are positive externalities in the production process, it is asserting that the free market will
A) produce less than is optimal from society's point of view.
B) produce more than is optimal from society's point of view.
C) produce the correct amount but charge too high a price.
D) produce the correct amount but charge too low a price.
E) None of the above.
A
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In the classical model, a temporary decrease in government spending would cause a decrease in
A) output, the real interest rate, real wages, and the price level. B) employment, the real interest rate, real wages, and the price level. C) output, employment, the real interest rate, and the price level. D) output, employment, real wages, and the price level.
Nominal GDP measures output of final goods and services in physical terms
a. True b. False Indicate whether the statement is true or false
The difference in wages between college graduates and high school graduates:
A. has increased in recent years. B. is smaller than in the past. C. is nonexistent when labor markets are in equilibrium. D. has been stable for several decades.
Suppose the dollar-euro exchange rate falls. Then
A. the dollar is less valuable relative to the euro. B. French firms will import more from the United States into France. C. U.S. firms will export less to France. D. the euro is more valuable relative to the dollar.