In the above figure, if a firm is cleaning up Q4 units of pollution, it is an
A) efficient solution, because marginal social benefits are greater than marginal social costs.
B) efficient solution, because marginal social benefits are equal to marginal social costs.
C) inefficient solution, because marginal social benefits are greater than marginal social costs.
D) inefficient solution, because marginal social costs are greater than marginal social benefits.
D
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Why are public goods non-rival in consumption? Explain with a real-world example
What will be an ideal response?
What does the coefficient a in the new classical expression for short-run aggregate supply represent?
A) the full employment level of output B) the price level in the previous period C) how much output responds when the actual price level differs from the expected price level D) how much the price level responds when the actual level of output differs from the full employment level of output
Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at $0.20 per pound when 500 pounds are grown. If the long-run supply curve is horizontal, then
A) some firms will enjoy long-run profits because they operate at minimum average cost. B) the long-run price will be $0.20 per pound. C) each consumer will purchase $100 worth of potatoes. D) the long-run price will be set just above $0.20 per pound.
There is a strong consensus among economists in favor of free trade. Governments appreciate the reasons for free trade as well but they may sometimes restrict trade because
a. their absolute advantage is greater than their comparative advantage b. their comparative advantage is greater than their absolute advantage c. the trade generates negative gains d. they may want to protect infant industries e. they prefer dumping to trade