A negative externality occurs when
A) there is rent-seeking.
B) benefits are imposed on individuals that are not part of a transactions.
C) there is creative destruction.
D) costs are imposed on individuals that are not part of a transaction.
D
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Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high. B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000. C) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high. D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low.
During the great canal-building era, from roughly 1815 to 1843, Hughes and Cain (2011) claim that
(a) most canals earned normal profits. (b) no canals earned profits. (c) all canals in the initial period of construction earned normal profits but none did in the later period because of over-construction and competition from the railroads. (d) the Erie Canal was one of the few, perhaps the only one, to earn normal profits.
Suppose you own a store that sells computers. You have determined that the demand function for your computers is Qd = D(P) = 900 - 3P. At what price would you sell the computers if you wanted to sell 60 of them?
A. $250 B. $275 C. $280 D. $300
The maximum possible production of goods and services generated by the fullest employment of the economy's resources is
a. impossible to achieve b. an unrealistic goal seldom achieved c. economic efficiency d. a point above the production possibilities curve e. possible only if the production possibilities curve shifts inward