According to Pigou, the best way to deal with a negative externality is to
A. tax it.
B. allow both parties to negotiate.
C. assign liability to the party with the highest cost of prevention.
D. assign liability to the party with the lowest cost of prevention.
Answer: A
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Which of the following statements is a normative statement?
A) Military spending as a percent of government spending decreased by 5 percent in the 1990s. B) Every American household should have health care insurance coverage. C) Welfare reform has decreased the amount the government spends on welfare. D) Fewer people are unemployed this year than last year. E) The price of computers fell last year.
Refer to the table below. If Stuffed Pies is currently producing 9 units of quality, to maximize profit, Stuffed Pies should ________ the units of quality.
Stuffed Pies is a frozen calzone manufacturer. The table above summarizes Stuffed Pies' marginal revenue and marginal cost of quality at various quality amounts.
A) increase
B) decrease
C) decrease by 50 percent
D) not change
Who is considered officially unemployed?
A) Six months after failing to get a job, Abba quit looking. B) Monica graduated from college last summer but is still unemployed despite her spirited search. C) Kariuki is a retired teacher. D) Chen is going to school full time.
Commitments to make or receive payments in the future are made easier by money's function as a _____
a. unit of account b. store of value c. medium of exchange d. form of barter e. commodity