Suppose that a large and a small wind turbine have similar installation, operating, and maintenance costs, but a large turbine has four times the generating capacity but costs less than three times as much as a small turbine. The wind power industry faces:
A. constant returns to scale.
B. economies of scale.
C. diseconomies of scale.
D. a hump-shaped cost curve.
Answer: B
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In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution, the pollution tax must be set equal to the
A) marginal private cost. B) marginal external cost. C) marginal social cost. D) marginal benefit of polluting. E) price of the good.
Lowering the discount rate will
A) increase reserves, encourage banks to make more loans, and increase the money supply. B) decrease reserves, encourage banks to make fewer loans, and increase the money supply. C) decrease reserves, encourage banks to make fewer loans, and decrease the money supply. D) increase reserves, encourage banks to make more loans, and decrease the money supply.
Suppose everyone in a town prefers spending on improved public transportation systems instead of public parks, and prefers spending on public parks instead of building a public zoo. An ideal voting system would ensure that:
A. public transportation spending could beat zoo funding. B. zoo funding could beat public transportation. C. public parks could beat transportation spending. D. zoo funding could beat public parks.
According to the law of supply, if the price of calculators decrease, the supply of calculators will decrease, everything else held constant
a. True b. False Indicate whether the statement is true or false