A local bar provides free pretzels and peanuts and cheap drinks on a Monday night. But soon a fight breaks out in the parking lot between two quarreling patrons. Neighboring homeowners awaken as a result, and call the police
What can we clearly conclude? A) The bar's free pretzels and peanuts generate a positive externality.
B) Each fighter imposes a negative externality on the other fighter.
C) The fighters impose a negative externality on the neighboring homeowners.
D) The neighboring homeowners impose a negative externality on the police.
E) All of the above are true.
C
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The production function is concave in capital because
A) the contribution to production of each additional unit of capital decreases. B) the marginal product of capital is increasing. C) the marginal product of labor is decreasing. D) the cost of loans increases with their quantity.
If producing more output has no effect on average cost then
A) there are diseconomies of scale. B) there are economies of scope. C) there are diseconomies of scope. D) there are no economies of scale.
Net Investment includes Gross Investment minus what?
a. Aggregate Expenditure b. Net Exports c. Capital Goods d. Depreciation
The long-run aggregate supply curve is:
What will be an ideal response?