If the government were to restrict consumption to the efficient level in a market where a negative externality is present, the market outcome:
A. would not be efficient.
B. would be equitable.
C. would then be efficient.
D. None of these statements is necessarily true.
Answer: A
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A subsidy in an industry would result in: a. an increase in consumer surplus. b. an increase in producer surplus c. both (a) and (b)
d. none of the above.
In what way is government debt like individual debt?
A. Inflation reduces the real value of both types of debt. B. Government never has to pay back its debt. C. Government can pay its debt by printing money. D. Much of government debt is owed to its own citizens.
A(n) ________ in a country's money supply causes international capital
A. contraction; stock to stabilize. B. expansion; outflows. C. contraction; outflows. D. expansion; inflows.
When the demand curve for an input is a derived demand this means that
A) the demand curve is derived from the demand for the final product being produced. B) the demand curve depends upon the MFC. C) the law of diminishing marginal product does not hold. D) the demand curve slopes upward.