If the cost of housing increases by 10 percent, then, other things the same, the CPI is likely to increase by about
a. 1.7 percent.
b. 3.3 percent.
c. 4.2 percent.
d. 10 percent.
c
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Suppose the government imposes a per unit tax on an item whose production process creates a negative externality. Suppose the tax is exactly the value of the marginal externality cost. If the government now uses the tax revenue to clean up pollution from this process, the market will:
a. have internalized all costs and benefits. b. be inefficient. c. be destroyed. d. not have failed. e. be subject to obligatory controls.
When a labor union confronts a monopsonist, the result is that union workers receive a wage
a. greater than their marginal labor cost b. that maximizes the return to monopsony power c. equal to a perfectly competitive labor market d. below the labor supply curve e. equal to the marginal revenue product
The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Karl.
The slope of the PPC between points Y and Z is determined by ________ opportunity cost.
A. Janna and Drew's B. Drew's C. Janna's D. Kari's
Suppose the short-run supply curve is a straight line of slope +1 that intersects the origin. The long-run supply curve will be
A. shallower. B. steeper. C. horizontal. D. vertical.