If the production of a good involves negative externalities, ________
A) the quantity of the good supplied in the market is lower than the efficient level
B) the optimal price of the good is higher than the price charged in the market
C) total welfare can be increased by increasing the production of the good
D) average cost of production can be reduced by increasing output above the optimal level
B
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Refer to Figure 4-13 which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded, and quantity exchanged?
What will be an ideal response?
In foreign exchange markets, who demands dollars and who supplies dollars?
What will be an ideal response?
Diminishing marginal productivity implies
a. decreasing marginal costs b. increasing marginal costs c. decreasing average costs d. decreasing total costs
Exhibit 17-1 Nation of Padia
Exhibit 17-1 shows the production possibilities curve of the nation of Padia, an LDC. With foreign investment, which of the following changes that was not previously possible would become possible?
A. a move from V to III B. a move from IV to II C. a move from III to a point beyond the production possibilities curve D. a move from III to I