If European Economies Experience a Period of Sustained Recession and the United

question 16

Multiple Choice

If European economies experience a period of sustained recession and the United States does not, what will happen in the United States?

• A)an increase in aggregate supply 
• B)a decrease in aggregate supply 
• C)a decrease in aggregate demand 
• D)an increase in aggregate demand

Distinguish between public and private solutions to externalities and the conditions under which they are effective.

Analyze the implications of externalities on market failure and the role of government in correcting these failures.

Understand the concept of marginal social cost and marginal social benefit in the context of pollution and externalities.

Comprehend the challenges associated with empirically measuring and regulating externalities.

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Definitions:

Own-price Elasticity

a measure of how much the quantity demanded of a good or service changes in response to a change in its price.

Number of Substitutes

The quantity of alternative products or services that consumers can choose from in a market.

Absolute Value

A number’s distance from zero on the number line, without considering direction; always a positive value or zero.

Price Elasticity

A measure of how the quantity demanded of a good changes in response to a change in its price.