In which of the following situations would a positive externality most likely be involved?
A. Shawn is sitting at home one day when she gets a telephone call, informing her that she has won $10,000 in a contest she entered three months ago.
B. There are eight houses in the neighborhood where Rodney lives. Rodney likes nice-looking yards, and last week his neighbors began to beautify their yards.
C. Willy needs eight hours of sleep each night to feel good. Last night he got eight hours of sleep.
D. Patrick received an A on a biology exam. He is feeling better about his chances of getting admitted to medical school.
Answer: B
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If businesses are pessimistic, they are ________.
A. less likely to borrow and invest B. more likely to borrow and invest C. moving down, along the investment demand curve D. moving up, along the investment demand curve
Refer to the graph shown. A decrease in aggregate demand in the short run is likely to cause a movement from:
A. B to A. B. B to D. C. C to D. D. C to A.