An unregulated paint factory that pollutes a river results in ______ and _____
A. overproduction; a price that exceeds the marginal benefit from the good
B. underproduction; a price that equals the marginal benefit from the good
C. the efficient quantity produced; a marginal benefit equal to the mar-ginal social cost
D. an inefficient quantity produced; a marginal benefit below the mar-ginal social cost
D Figure 9.2 in the textbook shows that answer D is correct.
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If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then the price elasticity of demand is equal to:
A. 0.5. B. 5. C. 2. D. 0.05.
Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate falls, then
a. both the nominal and the real interest rate fall. b. neither the nominal nor the real interest rate fall. c. the nominal interest rate falls, but the real interest rate does not. d. the real interest rate falls, but the nominal interest rate does not.
Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, demand for inputs causes input prices to rise. It is likely that continued growth will result in:
A. economies of scale. B. reduced fixed costs. C. diseconomies of scale. D. increasing marginal returns.
As compared to the basic Nash-Cournot equilibrium for duopolists where the firms face the same market demand curve and have identical costs, in the situation where the firms produce products which are viewed by consumers as not being identical,
A) there will generally be different prices charged by the two firms. B) there will generally be different quantities produced by the two firms. C) one or both of the firms may practice spurious differentiation. D) All of the above.