Explain the concept of marginalism as it is used in economics
What will be an ideal response?
The process of analyzing the additional or incremental costs or benefits arising from a choice or decision.
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Answer the following statement(s) true (T) or false (F)
1. A Pigou tax forces car manufacturers to internalize the cost of pollution. 2. Cap and Trade is so named because the government puts a “cap” on the amount of exports that domestic firms are allowed to “trade” with foreign nations. 3. A Cap and Trade system is more prone to error than a Pigou tax. 4. Pigou taxes are unnecessary in the presence of transaction costs. 5. Pigovian analysis indicates that a subsidy should be awarded when economic activity creates social benefits.
The table below shows the weekly demand for hamburgers in a market where there are just three buyers.PriceQuantity Demanded by Buyer 1Quantity Demanded by Buyer 2Quantity Demanded by Buyer 3$6746597841510123211516Refer to the table. If the price of a hamburger decreases from $5 to $3, then the weekly market quantity of hamburgers demanded will
A. increase from 120 to 156. B. increase from 24 to 52. C. increase from 29 to 55. D. decrease from 52 to 24.
Mixed bundling is more profitable than pure bundling when
A) the marginal cost of each good being sold is positive. B) the consumers' reservation values of each good being sold are not perfectly negatively correlated with one or another. C) Both A and B are correct. D) the marginal cost of one good is zero.
Economic mobility in the United States is so great that fewer than
a. 3 percent of families are poor for 8 or more years. b. 5 percent of families are poor for 8 or more years. c. 8 percent of families are poor for 8 or more years. d. 10 percent of families are poor for 8 or more years.