Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Firm X ($/day)$500$514$530$555$585Cost to Firm Y ($/day)$400$420$445$480$520Cost to Firm Z ($/day)$300$325$360$400$550 For all three firms, the marginal cost of pollution abatement is:
A. increasing.
B. decreasing and then increasing.
C. constant.
D. decreasing.
Answer: A
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Automatic stabilizers smooth fluctuations in the economy because they produce changes in the government's budget that
A. reinforce changes in GDP. B. produce a dynamically-adjusted budget. C. produce a standardized budget. D. help offset changes in GDP.
A market is initially in a long-run equilibrium and there is a permanent increase in demand. After the new long-run equilibrium is reached, there
A) are more firms in the market. B) are fewer firms in the market. C) are the same number of firms in the market. D) probably is a different number of firms in the market, but more information is needed to determine if the number of firms rises, falls, or perhaps does not change. E) is no change in the market.
If its value of cross-price elasticity is negative, a good must be a necessity
a. True b. False
The Keynesian approach assumes that
A. the economy is self-regulating. B. the government budget is always in deficit. C. the price level does not change. D. there is no unemployment in the economy.