From an economic perspective, there is "too little" pollution in a market if
a. The profits of businesses are not maximized
b. The marginal benefits of a polluting activity exceed the marginal costs
c. The marginal costs of a polluting activity exceed the marginal benefits
d. The net social benefits of pollution are zero
e. The net private benefits of pollution are zero
Answer: b. The marginal benefits of a polluting activity exceed the marginal costs
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If government expenditure on goods and services increase by $10 billion, then aggregate demand
A) increases by $10 billion. B) increases by $10 billion multiplied by the government expenditure multiplier. C) decreases by $10 billion multiplied by the government expenditure multiplier. D) decreases by $10 billion. E) increases by $10 billion multiplied by the tax multiplier.
Refer to Scenario 14.1. Marco and Lisette decide to help each other out and agree to split any medical bills from their doctor. With this new arrangement, Lisette's dominant strategy will give her a net benefit of
A) $45. B) $75. C) $120. D) $150.