Suppose that flu shots create a positive externality equal to $8 per shot. Further suppose that the government offers a $11-per-shot subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?
a. They are equal.
b. The equilibrium quantity is greater than the socially optimal quantity.
c. The equilibrium quantity is less than the socially optimal quantity.
d. There is not enough information to answer the question.
b
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The price of natural gas fell and the quantity sold also fell. Everything else being equal, it is consistent that
A. the price of oil fell. B. natural gas workers received large wage increases. C. more efficient gas drilling equipment was installed. D. consumer incomes rose. E. the supply of natural gas fell.
When economists assume that people are rational and respond to incentives, they mean
A) people act with kindness. B) people act in their own self-interest. C) people are altruistic. D) people are selfish.
In developing countries, economists have found ________ correlation between a person's height and the wages he can earn in the farming sector
A) no B) an inverse C) a weak D) a strong
On the eve of the Civil War, cotton was the major crop in the Old South
Indicate whether the statement is true or false