Suppose that in the market for paper, demand is p = 100 - Q. The private marginal cost is MCp = 10 + Q. Pollution generated during the production process creates external marginal harm equal to MCe = Q. What is the total external harm at the competitive market level of output?
A) 1350.5
B) 2025
C) 672.5
D) 1012.5
D
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Option A provides $9,000 with probability 50 percent or $11,000 with probability 50 percent. Option B provides $8,000 with probability 50 percent or $12,000 with probability 50 percent. For most people the cost of risk associated with B is
A) less than that associated with A. B) the same as that associated with A. C) exactly twice that associated with A. D) more than twice that associated with A.
An application of behavioral economics is:
A. price inconsistency. B. rational cost-price decision making. C. forgetting the fungibility of money. D. All of these are applications of behavioral economics.
If a technological breakthrough reduces input quantities needed to produce some item,
A. cost of production will be increased. B. the price of the product will rise. C. the price of the product will fall. D. quantity demanded of the product will fall.
Differences in marginal revenue products among workers can help explain the presence of wage differentials
a. True b. False