When a product or service has a positive externality and does not have a negative externality,

a.marginal private cost equals marginal social cost.

b.marginal private benefit equals marginal social cost.

c.marginal private benefit equals marginal social benefit.

d.marginal social cost equals marginal social benefit.

e.marginal external cost equals marginal external benefit.

Voluntary trade solves the problem of scarcity. Select one: True False

If marginal costs are zero, a business maximizes profits by choosing the highest quantity of output where marginal revenue equals zero. Select one: True False

When the Bank of Canada sells bonds, interest rates Select one:

a. fall, business investment increases, and the Canadian dollar appreciates.

b. fall, business investment increases, and the Canadian dollar depreciates.

c. fall, business investment decreases, and the Canadian dollar appreciates.

d. rise, business investment decreases, and the Canadian dollar depreciates. e. rise, business investment decreases, and the Canadian dollar appreciates.

Quantitative easing Select one:

a.floods the financial system with debt.

b.creates risks of inflation as the economy approaches potential GDP.

c.replaces liabilities on chartered bank balance sheets with debt.

d.makes it harder for chartered banks to make new loans.

e.does all of the above.

If the inflation rate is 10 percent, products that used to cost $80 cost ________ a year later. Select one:

a.$70

b.$88

c.$81

d.$800

e.$90

If aggregate demand does not change, aggregate supply policies for economic growth Select one:

a.increase real GDP, increase potential GDP, and raise the price level.

b.increase real GDP, do not change potential GDP, and decrease the price level.

c.increase real GDP, do not change potential GDP, and do not change the price level.

d.increase real GDP, increase potential GDP, and lower the price level.

e.fail to produce economic growth.

Marginal benefits are always larger than total benefits. Select one: True False

Your demand will be more elastic when Select one:

a.you spend a large fraction of your income on the product or service.

b.you are addicted to the product or service.

c.close substitutes are hard to find.

d.there isn't much time to adjust your spending patterns.

e.the product or service is essential to your survival.

You pay $10,000 for a one-year bond with an original value of $10,000 and a single fixed payment of $800 at the end of the year. You hold the bond until the year is up, but during that time, the market price of the bond falls to $8,000. The interest rate on your investment is Select one:

a.100 percent.

b.80 percent.

c.8 percent.

d.10 percent.

e.higher than interest rates on similar bonds at the end of the year.

Medical care in Canada is regulated by a Select one:

a. government-appointed agency or board.

b. Crown corporation.

c. natural monopoly.

d. government department.

e. professional association