Net capital outflow is defined as the purchase of
a. foreign assets by domestic residents minus the purchase of domestic assets by foreign residents.
b. foreign assets by domestic residents minus the purchase of foreign goods and services by domestic residents.
c. domestic assets by foreign residents minus the purchase of domestic goods and services by foreign residents.
d. domestic assets by foreign residents minus the purchase of foreign assets by domestic residents.
a
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A profit maximizing firm in any type of market for its output would hire the quantity of labor at which
a. the marginal cost of output is equal to the marginal revenue product of labor, where MRP is sloping downward. b. the wage rate is equal to marginal revenue product, where MRP is downward sloping. c. the wage rate is equal to marginal revenue product, where MRP is still sloping upward. d. the difference between the wage rate and marginal revenue product is greatest.
The deadweight loss (or excess burden) resulting from levying a tax on an economic activity is the
a. tax revenue raised by the government as the result of the tax. b. loss of potential gains from trade from activities forgone because of the tax. c. increase in the price of an activity as the result of the tax levied on it. d. marginal benefits derived from the expansion in government activities made possible by the increase in tax revenues.
Suppose Vinnie is looking for a month-long vacation rental in San Diego. The first vacation rental Vinnie finds costs $800 per month. If he looks for another vacation rental, there's a 75 percent chance he'll find another one for $800 per month and a 25 percent chance he'll find one for $600 per month. Other than price, all of the vacation rentals are identical. Vinnie's marginal cost of searching for an additional vacation rental is $45. Since searching for another apartment is a ________ gamble, if Vinnie is risk-neutral, then he ________ search for another apartment.
A. better-than-fair; will not B. fair; will not C. fair; will D. better-than-fair; will
Suppose that flu shots create a positive externality equal to $12 per shot. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.