A government ban on a good that suffers from overconsumption may be ineffective if the:
A. likelihood of being caught breaking the ban is sufficiently high.
B. likelihood of being caught breaking the ban is very low.
C. punishment for breaking the ban is severe.
D. public did not participate in setting the punishments.
B. likelihood of being caught breaking the ban is very low.
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Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?
A) at 0 gallons B) at 10 gallons C) at 40 gallons D) at 60 gallons
Voluntary exchange increases economic efficiency
A) because neither the buyer nor the seller would agree to a trade unless they both benefit. B) because voluntary exchange only takes place with government permission. C) because it allows wealthy individuals to act altruistically and give to the poor. D) because it is free and consequently does not cost anything.
Some economists believe that deficit spending can impose a burden on future generations. Which of the following does NOT explain the burden?
A) Investment will be crowded out by an increase in current consumption. B) Deficit spending that is allocated to purchases leads to long-term increases in real GDP. C) Future generations will have a smaller capital stock that will reduce their wealth. D) Future generations will have to be taxed at a higher rate.
For the cost function C(Q) = 500 + 12Q + 4Q2 + Q3, what is the marginal cost of producing the eighth unit of output?
A. $268 B. $184 C. $524 D. $852