Which of the following is an example of an external benefit?
A. A company opens a slaughterhouse at the end of your street.
B. Firms are able to reduce their costs of production by using a more efficient technology.
C. The city spends $500,000 to upgrade the local jail.
D. More people start to install solar panels on their roofs, and as a result, electricity use goes down as does the pollution created by the generation of electricity.
Answer: D
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A peak is the
A) lower turning point of a business cycle when an expansion ends. B) lower turning point of a business cycle when a recession ends. C) upper turning point of a business cycle when an expansion ends. D) upper turning point of a business cycle when a recession ends.
A curve that shows the cost to the firm of hiring an additional unit of a resource is known as a
a. marginal product curve b. marginal revenue product curve c. total revenue product curve d. marginal revenue curve e. marginal resource cost curve
If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. Which of the following statements is correct?
A. Ana has both an absolute advantage and the comparative advantage in fudge. B. Ana has the comparative advantage in fudge, but Leo has the absolute advantage in fudge. C. Ana has the comparative advantage in toffee, but Leo has the absolute advantage in toffee. D. Leo has both the absolute advantage and the comparative advantage in fudge.
Because most people prefer smartphones to flip phones, firms can improve efficiency by
A. stopping production of flip phones and starting production of smartphones. B. stopping production of both flip phones and smartphones. C. increasing production of both flip phones and smartphones. D. starting production of flip phones and stopping production of smartphones.