Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?
a. Hire the firefighter because additional fire protection is priceless.
b. Hire the firefighter if the cost of the new firefighter is less than $75,000.
c. Do not hire the firefighter because the costs exceed the benefits.
d. Hire the firefighter only if the benefit to the residents exceeds $75,000.
b
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National output and national income are essentially the same because
A) every purchase implies a sale. B) every cost implies a benefit. C) every profit implies a loss. D) every gain implies a sacrifice.
The majority of small businesses
A) are privately owned. B) are managed by professional managers. C) raise funds in financial markets. D) are self-financing.
Which of the following would not be considered a negative externality?
a. Smelter, Inc. creates steel and pollution. b. Your friend buys a new puppy that barks every night. c. You have an adverse reaction to a medication your doctor prescribed for you. d. Your neighbor plays loud music that you dislike through stereo speakers set up on his deck.
The two year time period it will take a company to build a new factory is an example of what?
a. short-run b. long- run c. diminishing marginal returns d. implicit costs