Bobby drives her car to work; Bill takes the bus. They are both behaving efficiently as long as we assume
A) it costs the same for Bobby to drive the car as it does for Bill to take the bus.
B) both Bobby and Bill value their trips equally.
C) Bobby and Bill are traveling to different locations.
D) both Bobby and Bill voluntarily selected the forms of transportation they take to work.
D
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Suppose the market-clearing wage for pizza delivery workers is $7.00 per hour, but a $10.00 per hour minimum wage is enacted. Other things constant, the higher minimum wage tends to
A) increase the supply of pizza delivery workers. B) decrease the quantity demanded of pizza delivery workers. C) create a shortage of pizza delivery workers. D) accomplish all of the above. E) accomplish none of the above.
If the U.S. government increases spending, the U.S. Treasury
a. has the legal right to issue currency to pay for the spending. b. does not have the legal right to issue currency to pay for the spending. c. usually pays for the spending by selling bonds directly to the Fed. d. seldom pays for the spending by selling bonds to the public.
Briefly and concisely define the following concepts and terms
a. marginal social cost b. detrimental externalities c. free-rider problem d. cost disease e. "defective telescopic faculty"
Long-run equilibrium under monopolistic competition requires that
a. the demand curve intersect the average cost curve. b. the demand curve be tangent to the average cost curve. c. price be equal to marginal cost. d. quantity produced be at the point where average cost is at a minimum.