If people took external costs like pollution into consideration:
A. the markets for these goods creating such externalities would generate greater surplus.
B. they would act in a way that is optimal from a societal perspective
C. they would consume less of the goods causing these externalities.
D. All of these statements are true.
Answer: D
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Refer to Figure 18.3. Livonia has a comparative advantage in the production of
A) pogo sticks. B) scooters. C) both scooters and pogo sticks. D) neither scooters nor pogo sticks.
Assuming the economy is experiencing a recessionary gap, classical economists predict that: a. wages will remain fixed
b. monetary policy will sell government securities. c. higher wages will shift the short-run aggregate supply curve leftward. d. lower wages will shift the short-run aggregate supply curve rightward. e. none of the above.