An increase in capital inflows will
A) increase the equilibrium exchange rate. B) increase net foreign investment.
C) increase capital outflows. D) decrease capital outflows.
A
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When there is reason to think that the existing structure of incentives will cause individuals in the market to act in ways that are inconsistent with ideal economic efficiency, economists say that
a. market failure is present. b. democratic political decision-making will lead to the ideal efficient outcome. c. government action, however well intended, cannot improve the situation. d. government failure is present.
Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because
a. those who stand to gain have an incentive to tell the truth. b. those who stand to lose have an incentive to exaggerate their true costs. c. answers to the survey questions will always be downwardly biased. d. not everyone asked will be using the highway.
Sources of increasing returns that help raise productivity growth include the following, except:
A. More specialized inputs B. Spreading of development costs C. Network effects D. Low unemployment
If the marginal revenue of the next unit a firm produces is $50 and its marginal cost is $35, a firm should:
A. increase production. B. reconsider past production decisions. C. decrease production. D. hold production constant.