When a negative externality is present in a market, the quantity consumed:
A. is often less than the socially optimal quantity.
B. is the same as the socially optimal quantity.
C. is more than the socially optimal quantity.
D. is always less than the socially optimal quantity.
Answer: C
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When Javier's income increases by $5,000, he spends an additional $3,750 dollars. This implies that his marginal propensity to consume is 0.75
Indicate whether the statement is true or false
Which of the following statements best describes the dangers of a sustained pattern of high budget deficits and high trade deficits?
a. A sustained pattern of high budget deficits and high trade deficits becomes dangerous when the inflow of foreign investment capital is not funding short-term portfolio investment in government bonds but instead is funding long-term physical capital investment by firms. b. A sustained pattern of high budget deficits and high trade deficits becomes dangerous when the inflow of foreign investment capital is not funding long-term physical capital investment by firms but instead is short-term portfolio investment in government bonds. c. A sustained pattern of high budget deficits and high trade deficits becomes dangerous when the outflow of foreign investment capital is from short-term portfolio investment in government bonds and not from long-term physical capital investment by firms. d. A sustained pattern of high budget deficits and high trade deficits becomes dangerous when the inflow of foreign investment capital is funding both long-term physical capital investment by firms and short-term portfolio investment in government bonds.
For a monopsonist, the marginal labor cost is always
a. equal to the wage rate b. less than the wage rate c. greater than the wage rate d. the same as the labor supply e. the same as the labor demand
If your firm's production function has constant returns to scale and you increase all your inputs by 60%, then your firm's output will
a. not change. b. increase, but by less than 60% c. increase by 60% d. increase by more than 60%.