If a firm is not forced to pay for external costs, it will
A) continue to overproduce the good.
B) continue to under produce the good.
C) request a subsidy from the government.
D) raise prices.
A
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Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment today). Of the following, which is the highest annual interest rate at which you would prefer the four annual payments over the lump-sum payment?
a. 2% b. 5% c. 7% d. 10%
Which of the following is a question answered with normative economic reasoning?
A. If the college offers free textbooks for students, will more students read their textbooks? B. If the college provided less financial aid for out-of-state students, would more in-state students benefit? C. If the college increased its enrollment requirements, would class size decline? D. Should the college increase tuition to fund its athletic programs?