Suppose paper pulp mills are permitted to emit harmful pollutants, free of charge, into the air. How will the price and output of paper in a competitive market compare with their values under conditions of ideal economic efficiency?
a. The price will be too high, and the output will be too large.
b. The price will be too low, and the output will be too large.
c. The price will be too low, and the output will be too small.
d. The price will be too high, and the output will be too small.
B
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If the utility for two goods "x" and "y" can be measured as U = y, then it can be concluded that
A) "x" and "y" are perfect complements. B) "x" is a "bad". C) the indifference curves on the x,y graph are upward sloping where "x" is measured on the horizontal axis. D) the indifference curves on the x,y graph are horizontal where "x" is measured on the horizontal axis.
An example of an implicit cost of production is: a. the cost of raw materials used to produce bread in a bakery
b. the cost of labor in a factory that assembles DVD players. c. the income an entrepreneur could have earned working for someone else. d. all of the above.
Assume that you have just returned to the United States from a summer vacation in Russia, where you exchanged American dollars for Russian rubles. Your economic actions can be said to have:
a. increased the supply of American dollars in Russia. b. decreased the supply of Russian rubles in America. c. decreased the supply of American dollars in Russia. d. increased the demand for American dollars in America. e. increased the supply of Russian rubles in Russia.
A . If aggregate expenditure falls by $5 million, and the MPC is 0.8, explain the process that will drive the economy to a new equilibrium level. b. What will be the final result of this initial change?