An office supply store sells a ream of printer paper at a fixed price of $4.50. Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper?
A) marginal revenue
B) gross earnings
C) pure profit
D) marginal costs
E) net benefit
Answer: A
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Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $120,000. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean, and $300,000 if it's polluted. Suppose the law guarantees the farmer access to clean water from the river. Which of the following describes an efficient outcome in this case?
A. The owner of the mill is unable to pay the farmer enough to secure his permission to pollute the river. B. The farmer is unable to pay the owner of the mill enough to get him to stop polluting. C. The owner of the mill pays the farmer $110,000 for his permission to pollute the river. D. The farmer pays the owner of the mill $90,000 to stop polluting.
Which of the following would necessarily increase the equilibrium interest rate?
a. The demand for and the supply of loanable funds shift right. b. The demand for and the supply of loanable funds shift left. c. The demand for loanable funds shifts right and the supply of loanable funds shifts left. d. The demand for loanable funds shifts left and the supply of loanable funds shifts right.
In order to estimate the current annual GDP, economists:
A. multiply the quarterly estimate by four. B. take an average of the last four quarters measured. C. adjust quarterly GDP estimates to account for seasonal patterns. D. adjust it for changes in price level.
Research supports the claim that there are significant compliance costs associated with environmentally friendly production in countries with strong environmental laws, so that there are large incentives for firms to produce in countries with lax environmental laws.
Answer the following statement true (T) or false (F)