The firm's marginal profit (M?) at the efficient equilibrium is
Consider the following graph of the market for chemical solvents, production of which damages a waterbody used for recreation.
a. EH b. HL c. GK d. DG
d. DG
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A black market for housing exists because of a rent ceiling. The rent for housing in the black market is
A) the same as the equilibrium rent. B) lower than the ceiling rent. C) somewhere between the ceiling rent and the maximum rent a tenant is willing to pay. D) somewhere between zero and the equilibrium rent. E) not defined because the market is not legal.
When the government hires people to serve in the army, these people are no longer available to do other work. This choice illustrates the concept of
A) an incentive. B) a social interest/private interest conflict. C) opportunity cost. D) marginal benefit.
The social discount rate is an important component in net present value (NPV) calculations for public policies related to stock externalities, but economists do not agree on which value to use for this rate
Suppose a recent study reports that the NPV of a proposed carbon tax intended to reduce carbon dioxide emissions is positive, but the annual net benefits do not become positive until 2060. The authors of the study used a social discount rate of 2%. What can we say about the findings of the study if the research were repeated with a higher social discount rate? A) NPV would decline, and the annual net benefits would become positive after 2060. B) NPV would increase, and the annual net benefits would become positive before 2060. C) NPV would decline, and the annual net benefits would not change. D) The findings of the study would not change.
Which of the following is NOT an obstacle to economic development?
A) lack of entrepreneurship B) political instability C) corruption D) a central bank