When negative externalities like pollution exist, competition leads to:
a. a socially efficient outcome.
b. too few goods being bought and sold.
c. a market equilibrium price that is too high.
d. more production than would be efficient.
d
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The efforts of individuals to protect themselves against losses as a result of inflation
A) are irrational because one person's loss as a result of inflation is someone else's gain. B) can only succeed if everyone correctly anticipates the rate and timing of inflation. C) cannot succeed because no private citizen has the ability to stop inflation. D) use up valuable resources that could have been employed in other ways.
The Open Market Trading Desk is
A) another name for the Federal Open Market Committee. B) an organization of private traders in government securities. C) the area on the floor of the New York Stock Exchange set aside for bond trading. D) a group of private securities traders that the Fed has selected to participate in open market operations.
An economist would say the price is too high for a certain service if
a. poor people couldn't afford to buy it. b. nobody could afford to buy it. c. the price was above marginal cost. d. it is an essential service and consumes a significant share of income.
Which of the following statements is false?
A) A theory should be judged based upon whether or not it tells us the things we want to hear. B) Scientists are interested in finding out when their theories are wrong or right. C) Scientists are interested in building theories that can be refuted. D) If evidence is consistent with a theory's predictions, we state that the evidence fails to reject the theory.