For a competitive firm, the value of output ___________ and the marginal product of labor ___________ with each additional worker hired.
A. stays constant; decreases
B. increases; decreases
C. increases; increases
D. decreases; stays constant
A. stays constant; decreases
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Rather than prohibiting a good or service, the government might tax it. Imposing such a tax on a good or service ________ the equilibrium price and ________ the equilibrium quantity
A) raises; increases B) raises; decreases C) lowers; increases D) lowers; decreases
GDP differs from GNP because
A) GDP = GNP - net factor payments from abroad. B) GNP = GDP - net factor payments from abroad. C) GDP = GNP - capital consumption allowances. D) GNP = GDP - capital consumption allowances.
Economic models omit many details to allow us to see what is truly important
a. True b. False Indicate whether the statement is true or false
Suppose that electricity producers create a negative externality equal to $6 per unit. Further suppose that the government imposes a $8 per-unit tax on the producers. What is the relationship between the after-tax equilibrium quantity and the socially optimal quantity of electricity to be produced?
a. They are equal. b. The after-tax equilibrium quantity is greater than the socially optimal quantity. c. The after-tax equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.