An external benefit implies that private markets will provide ________ than the socially optimal quantity, and an external cost implies that private markets will provide ________ than the socially optimal quantity.
A. less; less
B. more; less
C. less; more
D. more; more
Answer: C
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An increase in ________ leads to an equal ________ in the monetary base in the short run
A) float; decrease B) float; increase C) discount loans; decrease D) Treasury deposits at the Fed; increase
High transaction costs will tend to
a. reduce the number of mutually beneficial exchanges that occur. b. allow easier specialization according to the law of comparative advantage. c. increase the value created by exchanges in an economy. d. increase the number of mutually beneficial exchanges that occur.
National income can be calculated by subtracting
A. depreciation from GDP. B. indirect business taxes from GDP. C. depreciation and indirect business taxes from GDP. D. transfer payments and taxes from GDP.
One reason some economists are critical of the Lorenz curve is because
A) it reflects income before taxes. B) it reflects income after taxes. C) it reflects only the top bracket of taxpayers. D) it reflects only the poor in the country.