The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered. At 10 concerts, the
A) marginal private cost equals the marginal external cost.
B) marginal social cost equals $60,000.
C) marginal private cost is more than $40,000.
D) marginal external cost equals $60,000.
E) marginal external cost equals $80,000.
D
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A large factory pours its toxic wastewater into a nearby river, and as a result, the residents of a downstream community experience high rates of illness and birth defects. The economic problem illustrated by this example is
A. marginal thinking. B. comparative advantage. C. repealing the laws of supply and demand. D. externalities. E. productivity growth.
Chapter 1 entitled "Economics: The Study of Opportunity Cost" makes the point that we
A. do not face tradeoffs because we have limited resources. B. can avoid tradeoffs if we simply make the right decisions. C. face tradeoffs because we have limited resources. D. can produce all we want of everything we want if we just work harder.
Suppose Cournot duopolists firms face the same market demand curve, but have differing costs. At the Nash-Cournot equilibrium, the firm with the lower cost will
A) have a lower price for its product than its competitor. B) produce a smaller output than its competitor. C) have a higher price for its product than its competitor. D) produce a larger output than its competitor.
When the central bank ________ the money supply, the LM curve shifts to the right, interest rates ________, and equilibrium aggregate output ________, everything else held constant
A) increases; fall; increases B) increases; rise; decreases C) decreases; rise; decreases D) decreases; fall; increases