Suppose a new government policy generates $6,000 of benefits for local businesses and $4,000 of costs. We can best describe the policy as
A. equitable.
B. Pareto efficient.
C. potentially efficient.
D. inefficient.
Answer: C
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Use the following graph of the demand for electric cars to answer the question below.
Which of the following would occur if electric cars became less expensive?
A. D3 to D1 B. Point a to point b C. Point b to point A D. D2 to D1
Lentz's Incorporated sells paper in a perfectly competitive market at a price of $2 per ream. At the profit-maximizing (cost-minimizing) level of output, average total cost is $2.50 per ream and average variable cost is $1.95 per ream
Should the firm continue to operate in the short run? Explain.
According to John Rawls, if people had to choose an income distribution without any knowledge of their own talents and abilities, they would likely prefer an income distribution that:
A. rewards hard work. B. rewards creativity. C. gives everyone an equal share. D. rewards innate intelligence
Transaction costs are
A. production costs. B. taxes on production. C. costs associated with exchange. D. regulations on production.