Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television
How much does the quantity demanded for DVRs change if the p rises by $40? A) drops by 10,000 DVRs
B) increases by 16,000 DVRs
C) drops by 2,500 DVRs
D) increases by 4,000 DVRs
A
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Suppose a firm pollutes a river when it produces a product. To achieve the efficient amount of output, a government could impose a ________ that equals the ________ of the pollution
A) pollution charge; marginal social cost B) pollution charge; marginal external cost C) pollution tax; marginal social cost D) pollution tax; marginal external cost E) pollution subsidy; marginal social cost
Identify two activities that generate positive externalities and two activities that generate negative externalities. Be sure to explain why each activity you identified generates the type of externality you stated.
What will be an ideal response?
If at some output level for a firm price exceeds average total cost, then the firm is earning an economic profit
a. True b. False Indicate whether the statement is true or false
Demand for low budget items, such as candy, is generally ________ than demand for large budget items, such as automobiles.
A. higher B. lower C. more elastic D. less elastic