Which of the following statements is (are) correct?
(x) An externality is the uncompensated impact of one person’s
actions on the well-being of a bystander.
(y) An example of an externality that causes market failure is the
case of a copper refinery that does not bear the entire cost of the
smoke it emits.
(z) If an externality, such as air or water pollution, is present
in a market, economic efficiency may be enhanced by government
intervention that reduces the presence of the pollution.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (z) only
Causes of market failure include
A. market power and incorrect forecasts of consumer demand.
B. externalities and market power.
C. externalities and foreign competition.
D. incorrect forecasts of consumer demand and foreign
competition.
E. Both A and D are correct
9. A typical worker in Italy can produce 24 units of product in an
8 hour day, where a typical worker in Poland produces 25 units of
product in a 10 hour day. We can conclude that
(x) worker productivity in Poland is higher than in Italy.
(y) the standard of living will be higher in Italy than in
Poland.
(z) productivity for the Polish worker is 2 1/2 units per hour and
3 units per hour for the Italian worker.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (y) only
9) Worker productivity in Italy = 24 / 8 = 3 and in Poland = 25/10 = 2.5. Z is true. X is false. Option d) is true.
Which of the following statements is (are) correct? (x) An externality is the uncompensated impact of...
Which of the following statements is CORRECT? Select one: a. An example of an externality is a situation where a bank opens a new office, and that new office causes deposits in the bank's other offices to decline. b. The NPV method automatically deals correctly with externalities, even if the externalities are not specifically identified, but the IRR method does not. This is another reason to favor the NPV. c. Both the NPV and IRR methods deal correctly with externalities,...
According to the open economy macroeconomic model, which of the following statements is (are) correct? (x) The usual effects of capital flight include a rightward shift of demand in the loanable funds market and a rightward shift of the NCO curve, (y) Capital flight typically causes a decrease in the domestic interest rate and an increase in NCO. (z) Capital flight typically causes the real exchange rate of the domestic currency to depreciate because capital flight causes an increase in...
Which of the following statements is (are) correct? (x) If the average income of an American is higher than the average income of a Canadian, it is most likely because productivity is higher in Canada than in the United States. (y) To improve living standards, policymakers should reduce spending on public education. (z) In general, government policies that lead to an increase in productivity will elevate the average income of the residents of that country A. (x), (y) and (z)...
which of the following statements about the loanable funds market is (are) correct? (x) When the supply of loanable funds shifts to the right then the equilibrium real interest rate decreases and the equilibrium quantity of loanable funds decreases. (y) When the demand for loanable funds shifts to the right then the equilibrium real interest rate increases and the equilibrium quantity of loanable funds increases. (z) If the demand for loanable funds shifts to the right and the supply of...
According to the textbook, which of the following statements is (are) correct? (x) If real GDP is higher in one country than in another, it is not necessarily true that the standard of living is higher in the country with the higher real GDP. (y) Real GDP per person is not a perfect measure of the well-being of individuals in society because it excludes things like leisure time, the value of goods produced at home, and environmental quality. (z) Poor...
13. Which of the following statements is (are) correct? (x) The natural rate of unemployment is the amount of the unemployment that the economy normally experiences. (y) Cyclical unemployment refers to the year-to-year fluctuations of unemployment around its natural rate that are due to short-run ups and downs of the economy (z) Suppose the natural rate of unemployment is 5.5 percent and the current rate of unemployment is 8.1 percent. The cyclical unemployment rate is a positive value of 2.6...
7. Which of the following statements is (are) correct? (x) In the market for money, as illustrated by the money market diagram, an increase in the value of money (1/P) would change the quantity of money demanded, but not the money supplied. (y) The demand for goods and services would increase when the money supply shifts rightward. (z) If the Fed bought bonds in the open market the money supply would shift rightward and the value of money would increase....
8. , which of the following statements is (are) correct? (x) The marginal cost of the fifth unit equals the variable cost of five units minus the variable cost of four units (y) The variable cost of 50 units equals the average variable cost of 50 units times 50. (z) If marginal cost is rising, then average variable cost is rising if marginal cost exceeds average variable cost. A. (x), (y) and (z) B. (x) and (y) only C. (x)...
2. Which of the following statements is (are) correct? (x) Suppose that the CPI was 200 in 2006 and was 160 in 1996. Then according to the CPI, $100 in 2006 purchased the same amount of goods and services as $80 in 1996. (y) A worker received $5 for a daily wage in 1930. If the CPI was 17.4 in 1930 and is 215.6 today then the value of that 1930 wage in today’s dollars is more than $68.25 but...
Which of the following statements is (are) correct? (x) Since the market for wheat is considered to be competitive, a wheat farmer maximizes profit by choosing a quantity at which the market price of wheat is greater than the farm's marginal cost of production. (y) If rational, profit-maximizing firms analyze at the margin, then marginal adjustments to production should increase profit (decrease loss) if the firm is not at its profit-maximizing amount of output. (z) When price is less than...