Two goods are substitutes if:
A) an increase in the price of one leads to a shift to the left in the demand curve for the other.
B) an increase in the price of one leads to an increase in demand for the other.
C) an increase in the price of one will increase the supply of the other.
D) a fall in the price of one leads to a reduction in supply for the other.
Ans: B) an increase in the price of one leads to an increase in demand for the other.
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A negative externality exists if
A) there are quantity controls in a market. B) the marginal social cost of producing a good or service exceeds the private cost. C) there are price controls in a market. D) the marginal private cost of producing a good or service exceeds the social cost.
In 2012, Ben Bernanke expressed which concern about persistently high unemployment?
A) It would result in high inflation. B) It would result in structural damage to the economy that would last for years. C) It would never decline to desired levels. D) It would cost him his job.