Economists view pollution as an economic problem that arises because:

Economists view pollution as an economic problem that arises because:
 a. private enterprise always minimizes the amount of pollution produced.
  b. profitable firms rarely pollute.
  c. as the economy grows, the level of pollution declines.
  d. firms that pollute do not pay the full social cost of producing their output.

QUESTION 2

If a household's income rises from 46,000 to 46,700 and its consumption spending rises from 35,800 to 36,400, then its:
 a. marginal propensity to consume is 0.86.
  b. marginal propensity to consume is 0.99.
  c. marginal propensity to consume is 0.98.
  d. marginal propensity to save is 0.01.
 e. marginal propensity to save is 0.86.

QUESTION 3

Which of the following is true of M1?
 a. It is equal to M2.
 b. It consists of all near-monies.
 c. It consists of certificates of deposit.
  d. It is the broader definition of money.
  e. It is only a fraction of M2.

QUESTION 4

At the market output and price for a good whose production causes pollution:
 a. pollution is eliminated.
  b. the marginal social cost of production exceeds the marginal social benefit of production
  c. the private cost of production equals the private benefit of production.
  d. the marginal social benefit of production equals the marginal social cost of production.

QUESTION 5

If the marginal propensity to consume, MPC, is less than 1 and a household's disposable income increases by 2,000, the household's consumption will _____.
 a. increase by less than 2,000
 b. increase by 2,000
 c. decrease if the total income of the household is above 100,000
 d. remain the same unless the change in income significantly affects the household's wealth
  e. increase by more than 2,000