Macro Economic 2 questions?
a) should be corrected by the subsidization of offendind firms.
b) is not an economic problem because it is external to the market system.
c) is an example of private production costs.
d) is an example of a spillover or external cost.
I think answer is d. correct?
2.In moving along a stable supply curve which of the following is not held constant?
a) the number of firms producing this good
b) expectations about the future price of the product
c) techiques used in producing this product
d) the price of the product for which the supply curve is relevant
Answer:
1. D is the correct answer. Pollution is typically viewed as a negative externality.
2. D is the correct answer. A, B, and C are some of the things that are held constant along a supply curve. Only the price of the product in question is changing.
P.S. These are more microeconomics than macroeconomics.
1. D
2. A or C. look up defition of stable supply curve in your notes or textbook - I do not know it, and cannot find it.
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