University researchers create a positive externality because what they discover in their research labs can easily be learned by others who haven't contributed to the research costs. Suppose that the federal government gives grants to these researchers equal to the their per-unit production externality. What is the relationship between the equilibrium quantity of university research and the
socially optimal quantity of university research produced?
a. The equilibrium quantity is greater than the socially optimal quantity.
b. They are equal.
c. The equilibrium quantity is less than the socially optimal quantity.
d. There is not enough information to answer the question.
b
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Economic growth is equal to:
a. total factor productivity plus amounts of resources. b. growth in total factor productivity plus growth in amounts of resources. c. total factor productivity minus marginal factor productivity. d. real GDP plus national output. e. GNP plus GDP.
In 2001 the United States and its NATO allies dropped millions of dollars' worth of bombs on Afghanistan. These bombs and the aircraft from which they were dropped
a. were netted out of GDP. b. increased GDP and increased personal welfare. c. decreased GDP and decreased personal welfare. d. were added to GDP.