In the case of either a positive or negative externality, a good's market price will:
A. not fully reflect a good's social marginal cost or social marginal benefit.
B. be too high.
C. be too low.
D. not equate the quantity supplied by sellers with the quantity demanded by buyers.
Answer: A
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Which of these is a likely impact of an increase in the price level in an economy on the aggregate supply in the economy?
a. An increase in the quantity of real GDP supplied b. A decrease in the quantity of real GDP supplied c. A leftward shift of the aggregate supply curve d. A rightward shift of the aggregate supply curve e. An increase in the slope of the aggregate supply curve
Mathematically, the value of the tax multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:
a. MPC ? 1. b. (MPC ? 1) / MPC. c. 1 / MPC. d. 1 ? [1 / (1 ? MPC)].