1. When a production externality has a beneficial effect on a bystander at the market equilibrium a. the market will be efficient b. the social cost of production is less than the private cost c. society is unlikely to benefit from production subsidies d. the private benefit from consumption is less than the social cost of production 2. In the short term, we would expect home construction to have a: a. High elasticity of demand b. Low elasticity of demand c. Low elasticity of supply d. High elasticity of supply 3. Which of the following would be associated with monetary policy operations in response to an economic downturn: a. A shift of the money demand curve to the right. b. A shift of the money supply curve to the right. c. A shift of the money demand curve to the left. d. A shift of the money supply curve to the left. 4. If the government cuts government spending, then over time the government budget deficit: a. will definitely rise b. will definitely fall c. may fall, or rise d. will stay the same
1. When a production externality has a beneficial effect on a bystander at the
a. the market will be efficient
b. the social cost of production is less than the private cost
c. society is unlikely to benefit from production subsidies
d. the private benefit from consumption is less than the social cost of production
2. In the short term, we would expect home construction to have a:
a. High
b. Low elasticity of demand
c. Low elasticity of supply
d. High elasticity of supply
3. Which of the following would be associated with
a. A shift of the money demand curve to the right.
b. A shift of the money supply curve to the right.
c. A shift of the money demand curve to the left.
d. A shift of the money supply curve to the left.
4. If the government cuts government spending, then over time the government budget deficit:
a. will definitely rise
b. will definitely fall
c. may fall, or rise
d. will stay the same
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