Suppose that good X is a luxury and that good Y is a necessity. Which good would you expect to have more price inelastic demand?
good Y
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What information does the government need to support an assertion that the 20-unit abatement standard is allocatively efficient?
Assume that there are two firms, each emitting 20 units of pollutants into the environment, for a total of 40 units in their region. The government sets an aggregate abatement standard (AST) of 20 units. The polluters' cost functions are as follows, where the dollar values are in thousands: Polluter 1: TAC1 = 10 + 0.75(A1)2, Polluter 2: TAC2 = 5 + 0.5(A2)2, MAC1 = 1.5A1, MAC2 = A2.
There are multiple models of pricing behavior in oligopolistic markets because
a. it is difficult to predict how rival firms will react to any pricing decision b. the demand curve slopes upward for these firms c. firms could earn profit in the long run unlike other markets d. price has a direct impact on profit for a firm in oligopoly e. the products are not identical in terms of quality, image, location
In deciding between using a public bureau or a private firm to collect garbage, elected officials may prefer a public bureau because
a. public bureaus have been shown to be more efficient than private firms in garbage collection b. they can convey political favors by giving people jobs in the public bureau c. public bureaus will be more responsive to consumers d. citizens would have to pay if private firms collected garbage e. taxes will be lower if the public bureau is in charge of garbage collection
Suppose that Adam and Sam each invest $5,000 in the same stock this year. Adam invests directly and earns 5% a year. Sam uses a retirement fund that charges an administrative fee and earns 4.75%. After 30 years, how much more money will Adam have than Sam?
a. $2,883.12 b. $2,526.78 c. $3,167.45 d. $3,044.62