A rain barrel is a container that captures and stores rainwater for landscape and garden use during dry periods. As a result, rain barrels benefit the community through water conservation. If homeowners do not consider this external benefit of rain barrels, then
a. the socially optimal quantity of rain barrels will be larger than the equilibrium quantity of rain barrels.
b. the socially optimal
quantity of rain barrels will be smaller than the equilibrium quantity of rain barrels.
c. the socially optimal price of rain barrels will be lower than the equilibrium price of rain barrels.
d. the market for rain barrels would benefit from a tax on rain barrels.
a
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The broadest indication of economy-wide inflation is captured by the
A) Consumer Price Index. B) Gross Domestic Product (GDP) deflator. C) Producer Price Index. D) Personal Consumption Expenditure Index.
"The market is not a self-regulating mechanism because prices are not flexible and nothing ensures that planned leakages will be offset by planned injections. To bring the economy out of depression and end high unemployment, some way of stimulating aggregate demand is required. This can be best achieved by a combination of government deficit spending and regulation of tax rates.". Which school of
thought does this statement best represent? a. Utopian economics b. Monetarist economics c. Classical economics d. Keynesian economics e. Marxist economics