Externalities cause the market mechanism to allocate goods and resources inefficiently because
a. nonconsenting third parties are generally not hurt by externalities.
b. producers and consumers ignore signals given by the competitive market.
c. prices are always higher than they should be.
d. competitive markets fail to give producers and consumers correct price signals.
D
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Which of the following changes does NOT shift the long-run aggregate supply curve?
A) a decrease in the labor force B) a fall in the price level C) a rise in number of college graduates in the labor force D) a tax hike that reduces the capital stock
In international trade, if a country has a "comparative advantage" in a product this means:
it is relatively more efficient than other countries in making the product it is relatively less efficient than other countries in making the product it is equally efficient as other countries in making the product it should import the product rather than export it