Which of the following is NOT an example of a negative externality?
A. Noise from a neighbor's motorcycle as he prepares to ride to work at 5a.m.
B. Fertilizer on a farmer's field that enters a river and promotes algae growth and kills fish downstream
C. Secondhand cigarette smoke
D. Damage to homes and businesses caused by a forest fire ignited by lightning
Answer: D
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Isoquants that are downward-sloping straight lines exhibit
A) an increasing marginal rate of technical substitution. B) a decreasing marginal rate of technical substitution. C) a constant marginal rate of technical substitution. D) a marginal rate of technical substitution that cannot be determined.
According to the law of demand, the
A. quantity demanded of a good does not vary with price. B. quantity demanded of a good varies directly with price. C. quantity demanded of a good is negatively related to its price. D. quantity demanded depends on the quantity supplied.
Which of the following events must cause equilibrium price to fall?
a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase
If an industry's long-run per-unit costs increase as its output increases then
A. the firm is most likely a constant-cost industry. B. the firm is most likely an increasing-cost industry. C. the firm's long-run economic profits must be greater than zero. D. the firm is most likely a decreasing-cost industry.