Answer the following questions true (T) or false (F)
1. Suppose the extra cost for a town to lower its speed limit by 5 mph is $20 per day. Then, the town should lower the speed limit if it can generate an additional benefit of $20 per day.
2. All economic questions arise from the fact that resources are unlimited.
3. Even if the population declines, scarcity will still exist.
1. TRUE
2. FALSE
3. TRUE
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The marginal cost to society of reducing pollution increases with the increased use of pollution abatement because
A) of the diminishing marginal utility of abatement. B) of the reduced demand for abatement. C) of the diminishing returns from abatement. D) of the high cost of abatement.
The equation for aggregate expenditure can be written as:
A. C+I+GDP B. C+Inventory+G+NX C. C+I+G+NX D. C+I+G+Exports
Which of the following correctly highlights a limitation of applying simultaneous equation models to time series data?
A. Most time series have variables with a unit root and 2SLS is complicated when applied to equations with such variables. B. 2SLS estimates are inefficient when applied to variables that are not in their levels but in first differences. C. It is difficult to form simultaneous equations which satisfy the rank and order conditions using time series data. D. The problem of serial correlation greatly limits the efficiency of simultaneous equation models and leads to inefficient estimations.
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hamburgers?
A. A B. B C. C D. D