Refer to the given data. Assume now that the prices of a and b are $15 and $20 respectively. To maximize profits, what combination of a and b should the employer hire?
Answer the question on the basis of the following marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit.
A. 3 of a and 5 of b.
B. 5 of a and 7 of b.
C. 7 of a and 7 of b.
D. 6 of a and 2 of b.
A. 3 of a and 5 of b.
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Dina is driving to work on an interstate highway at 90 MPH, well in excess of the legal speed of 65 MPH. Sandy is also driving to work at the same time, going 85 MPH. A state trooper pulls Dina over and gives her a speeding ticket. Sandy continues driving, but if Dina had not been speeding, the trooper would have ticketed Sandy instead. In terms of externalities, this story shows that:
a. Sandy's actions gave Dina a positive externality. b. Dina's actions gave Sandy a positive externality. c. Sandy's actions gave Dina a negative externality. d. Dina's actions gave Sandy a negative externality. e. Dina's and Sandy's actions did not create any externalities.
A tax that varies directly with the income of the person—the higher the income, the higher the tax rate—is known as a(n)
a. regressive tax b. progressive tax c. proportional tax d. flat tax e. excise tax
Comparing a set of feasible alternatives and picking the best one is an optimization process called? _________.
A. statistical inference B. likelihood estimation C. cost-benefit analysis. D. normative analysis.
Suppose the market for autoworkers is initially in equilibrium, but then suppose the automakers improve working conditions at the plants. What happens in the market for autoworkers?
A. The equilibrium wage rate and the equilibrium quantity of labor will both decrease. B. The equilibrium wage rate and the equilibrium quantity of labor will both increase. C. The equilibrium wage rate will increase and the equilibrium quantity of labor will decrease. D. The equilibrium wage rate will decrease and the equilibrium quantity of labor will increase.