Other things being equal, what impact does enhanced consumer information on the risk of colon cancer linked to red-meat consumption have on the equilibrium in the market for beef?
A. A decrease in both price and quantity;
B. An increase in price and decrease in quantity;
C. A decrease in price and an increase in quantity.
D. Not enough information is provided to answer this question;
Ans: A. A decrease in both price and quantity;
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Which of the following activities create a negative externality?
A) cleaning up the sidewalk on your block B) graduating from college C) keeping a junked car parked on your front lawn D) repainting the house you live in to improve its appearance
Suppose two corporate bonds with similar risk pay different rates of return. The process of arbitrage should:
A. not affect their rates of return. B. increase the return on the asset with the higher rate of return as the demand for it increases. C. increase the gap between the two rates of return. D. eventually equalize their rates of return.