Refer to the graph shown. Say that there is a negative externality associated with the production of the good depicted. The marginal social cost from consuming this good at the competitive equilibrium output level is:
A. either greater than or less than P0, depending on the elasticities of supply and demand.
B. less than P0.
C. equal to P0.
D. greater than P0.
Answer: D
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Rate of return regulation is most similar to
A) a marginal cost pricing rule. B) an average cost pricing rule. C) an average variable cost pricing rule. D) an inflation cost pricing rule.
All of the following are responsible for the removal of the formal trade barriers EXCEPT
A) the sustained efforts of the trading partners themselves. B) the General Agreement on Tariffs and Trade (GATT). C) the World Trade Organization (WTO). D) regional trade agreements such as NAFTA. E) the World Bank and the IMF.
If Sam's opportunity cost of a sweater is $37, which of the following prices would he have to observe in the market in order to sell a sweater?
A. $37 B. $37.01 C. $50 D. Sam would sell a sweater at any of these prices.
Economists speaking like policy advisers make
a. claims about how the world is. b. descriptive statements. c. normative statements. d. More than one of the above is correct.