Bonds ________ and stocks ________
A) have a fixed number of interest payments; have a fixed number of dividend payments
B) have a fixed number of interest payments; may pay dividends forever
C) may pay interest payments forever; have a fixed number of dividend payments
D) always pay interest payments forever; always pay dividends forever
Answer: B
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The income effect of a price increase causes a decrease in the quantity of a normal good demanded
Indicate whether the statement is true or false
Firms that emit toxins into the air tend to
a. underproduce because the private cost of production exceeds the social cost b. overproduce because the social cost of production exceeds the private cost c. produce the same as nonpolluting firms d. produce at the socially optimal amount e. cover pollution costs in the product's price