The manager of a baseball team wants to hire a new pitcher for $4 million per year. Under what circumstances would it make sense for the team to do so?
What will be an ideal response?
If adding the pitcher to the team increases revenues by more than $4 million per year, the team will see an increase in its profits.
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Of the following, which best explains why Thomas Malthus was incorrect in his prediction that population would outstrip food supplies?
A) Malthus failed to realize that that human population would increase considerably. B) Malthus failed to recognize that economic growth is accompanied by smaller family sizes. C) Malthus incorrectly believed that economic growth would reduce birthrates. D) Malthus incorrectly predicted that modernization would increase the demand for children.
After a tax is imposed, a. consumers pay a higher price
b. consumers lose consumer surplus. c. producers lose producer surplus. d. all of the above are true.
What would be an optimal tax on pollution (a negative externality)?
a) one for which producers internalize the cost of the pollution b) one for which a benevolent social planner is able to maximize production c) one for which producers choose not to produce any pollution d) one for which the value to consumers at market equilibrium exceeds the cost of production (including tax)
Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Figure 3.1 Shifts of Supply and Demand Steel: the government introduces environmental restrictions on the dumping of wastes from producing steel.
A. A. B. B. C. C. D. D.