Suppose the private marginal cost of pumping water from an aquifer remains constant as the quantity of water pumped increases, and the marginal social cost is upward sloping
If the demand for water shifts to the right as population increases, then the amount of water pumped based only on private costs ________ and the social cost of the common property resource ________. A) decreases, decreases.
B) decreases, increases
C) increases, decreases
D) increases, increases
D
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The firm's marginal profit (M?) at the efficient equilibrium is
Consider the following graph of the market for chemical solvents, production of which damages a waterbody used for recreation.
a. EH b. HL c. GK d. DG
If the price of a good decreases, ceteris paribus, the consumer will experience (Select all that apply.)
a desire to consume a different bundle. the budget constraint rotating outwards along the x-axis the budget constraint rotating inwards along the x-axis an increase in utility. a northern or eastern movement on the indifference map a southern or western movement on the indifference map.
Several firms in an industry laid off their workers. Assuming all else equal, this will lead to a ________
A) higher rate of output in the industry B) higher rate of capacity utilization in the industry C) lower rate of capacity utilization in the industry D) higher real wage in the industry
The best remedy for market failure is often
a. a market-based solution. b. shutdown of the market. c. no government intervention. d. externalizing the externalities.