Suppose that the market price of good A equals the firm's cost of producing that good, but it does not reflect any costs imposed on society. Which of the following is FALSE?
A) The good is priced too low.
B) An external benefit is associated with good A.
C) Resources are over-allocated in the production of good A.
D) Too much of good A is being produced.
Answer: B
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The table above shows the exchange rates between various currencies and the U.S. dollar. Between 2015 and 2016, the U.S. dollar ________ against the Canadian dollar and the Euro ________ against the U.S. dollar
A) appreciated, depreciated B) appreciated, appreciated C) depreciated, appreciated D) depreciated, depreciated
Free trade and globalization is generally believed
A) to cause a degradation in the world's environment. B) to improve the environment by correcting for distortions caused by import competing policies. C) to help spread the best of each country's culture, so as to uplift global cultural standards. D) to help each country safeguard the best of its own culture. E) to make no difference in the economic welfare of the world.