If the social cost of producing a good or service exceeds the private cost
A) a positive externality exists.
B) the sum of consumer surplus and producer surplus is maximized.
C) the market achieves economic efficiency.
D) a negative externality exists.
Answer: D
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Property owned by governments is called:
A. Private property B. Shared property C. Public property D. Common property
The U.S. economy is experiencing falling output, falling employment, falling incomes and rising unemployment. These conditions best describe a business cycle ________
A) peak B) expansion C) recession D) trend E) trough
Which approach to calculating GDP best highlights the relative importance of different factors of production?
A. The expenditure approach B. The income approach C. The value-added approach D. Any of these measurements would work equally well for that comparison.
According to the Coase theorem, private markets will solve externality problems and allocate resources efficiently as long as
a. the externalities that are present are positive, not negative. b. government assigns property rights to the harmed party. c. private parties can bargain with sufficiently low transaction costs. d. businesses determine an appropriate level of production.