A chemical factory and a fishing club share a lake. Producing chemicals creates water pollution that harms the fish. The marginal social cost, private marginal cost, and marginal social benefit from producing chemicals are in the figure above
If polluting is legal and no one owns the lake into which waste is dumped, then the amount of chemicals produced each week will be A) 0 tons.
B) 4 tons.
C) 8 tons.
D) None of the above answers is correct.
C
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Government bureaus, unlike private firms,
a. derive their revenue by selling output to the government b. have incentives to respond to consumers' desires c. price their output by equating marginal cost and marginal revenue d. attempt to achieve zero profit e. receive little consumer feedback
Answer the following statements true (T) or false (F)
1. The shape of a demand curve is ultimately determined by the underlying choices about maximizing utility subject to a budget constraint. 2. For someone to determine the labor-leisure choice that will maximize her utility, she must place numerical values on the total and marginal utility that she would receive from every level of income and leisure. 3. The United States has higher rates of domestic savings as a percentage of gross domestic product than do China and Russia. 4. Even though a business pays income taxes based on its accounting profit, whether it is economically successful depends on its economic profit.
The consumption schedule shows:
A. a direct relationship between aggregate consumption and accumulated wealth. B. a direct relationship between aggregate consumption and aggregate income. C. an inverse relationship between aggregate consumption and accumulated financial wealth. D. an inverse relationship between aggregate consumption and the price level.
An increase in wealth ________ saving supply, and the supply of loanable funds curve ________
A) does not change; does not shift B) decreases; shifts rightward C) increases; shifts rightward D) increases; shifts leftward E) decreases; shifts leftward