A construction laborer might make more than a similarly skilled book store clerk because the working conditions in the book store are more desirable.
Answer the following statement true (T) or false (F)
True
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Suppose a new pollution tax of $0.01 per kilowatt-hour of electricity is imposed on coal-fired power producers by the federal government. Which of the following correctly describes how this tax will affect the market for electricity served by these power plants?
a. The supply of electricity will increase. b. The supply of electricity will decrease. c. Demand for electricity will increase. d. Demand for electricity will decrease.
Daniel’s Designer Drapes sells its standard curtain sets for $100. The government has just imposed a new tax on Daniel’s products. Which of the following would most likely be the price for a standard curtain set after this tax takes effect?
a. $50 b. $99 c. $100 d. $110
An economic activity in which benefits or costs affect third parties is called
A. a third-party good. B. an externality. C. the exclusion principle. D. a public good.
A perfectly competitive firm faces a market clearing price of $150 per unit. Average variable costs are at the minimum value of $200 per unit at an output rate of 100 units. Marginal cost equals $150 per unit at an output rate of 75 units. It can be
concluded that the short-run profit-maximizing output rate is A) 75 units, at which the firm earns zero economic profits per unit sold. B) 75 units, at which the firm earns $50 in economic profits per unit sold. C) 100 units, because marginal cost equals average variable costs. D) 0 units, because price is less than average variable costs.