Which of the following describes a positive externality?
A) The government imposes a tax on cigarettes in order to discourage smoking among teenagers.
B) People who do not attend college still benefit from others who receive a college education.
C) John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale.
D) Mary volunteers to drive her neighbor's children to soccer practice.
B
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An economy is said to have a comparative advantage in producing a particular good if it:
A) can produce more of all goods than another economy. B) can produce less of all goods than another economy. C) has the highest cost for producing that good. D) has the lowest cost for producing that good.
In the Keynesian model, an unwanted decrease in inventories leads to
A) falling interest rates. B) rising unemployment. C) rising output. D) falling money wages.