To correct for the underproduction of products with positive externalities, the government must
A) provide the incentives for the private sector to produce and consume the good.
B) provide tougher regulations on the industry.
C) increase taxes on the industry.
D) fine the industry.
Answer: A
Economics
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In September 2012 the U.S. unemployment rate was 7.8 percent while the natural unemployment rate was 6 percent. The U.S. economy
A) had a negative output gap. B) had a positive output gap. C) had an output gap of zero. D) was at full employment.
Economics
Explain why a firm may hire managers to operate outlets near the firm's headquarters, but may sell franchise rights for the outlets located greater distances from the headquarters
(With a franchise, the firm sells a brand name and a method of doing business to someone who then owns and operates the outlet.)
Economics