The production of capital is a form of roundabout production
a. True
b. False
A
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Suppose an individual's MRS (of steak for beer) is 2:1 . That is, at the current consumption choices he or she is willing to give up 2 beers to get an extra steak. Suppose also that the price of a steak is $1 and a beer is 25¢. Then in order to increase utility the individual should
a. buy more steak and less beer. b. buy more beer and less steak. c. continue with current consumption plans. d. Not enough information to answer the question.
A monopolistic competitive firm’s quantity produced is which of the following?
a. Greater than a monopolist but less than a perfect competition firm b. Less than a monopolists but greater than a perfect competition firm c. Greater than a monopolists and greater than a perfect competition firm d. Less than a monopolists and less than a perfect competition firm
Suppose there are two types of people: "good risks" who have 1 to 9 odds of falling ill, and "bad risks" who have a 1 to 3 odds of falling ill. If an insurance company cannot distinguish good risks from bad risks, what is the best way for it to deal with this problem?
a. Do not offer any insurance at 1 to 3 odds. b. Make everyone purchase insurance that offers 1 to 3 odds. c. Limit the amount of insurance that can be purchased at 1 to 9 odds. d. Provide policies that offer 1 to 9 odds and 1 to 3 odds, allowing each group to purchase the appropriate policy.
Explain the statement: “Clean air and water have become increasingly scarce and valuable resources because they have been treated in the past as if they were free and unlimited in supply.” What methods might be used to internalize spillover costs?
Please provide the best answer for the statement.