Suppose that firms in the chemical industry are allowed, free of charge, to dump harmful products into rivers. If this is the case in a competitive market, how will the price and output of the chemical products compare with their values under conditions of ideal economic efficiency?
a. Price is too low; output is too large.
b. Price is too high; output is too large.
c. Price is too low; output is too small.
d. Price is too high; output is too small.
a
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The break-even quantity is
a. Fixed Costs/Price b. Fixed Costs/Marginal Cost c. Fixed Costs/(Price – Marginal Costs) d. Contribution Margin/Fixed Costs
Suppose that you are an economist working for the United States government and are asked to defend the level and growth of government spending. What information could you use to your advantage?
Most economists believe that an increase in the quantity of money results in
a. an increase in the demand for goods and services. b. lower unemployment in the short run. c. higher inflation in the long run. d. All of the above are correct.
Steve is planning to divide his study time between English and calculus. It will take him two hours of study for each extra point in calculus and one hour of study to raise his English score by one point. He should allocate his time so that
a. the marginal utility of an hour spent studying calculus is twice the marginal utility of an hour spent studying English b. the marginal utility of an hour spent studying English is twice the marginal utility of an hour spent studying calculus c. the marginal utility per hour spent studying calculus equals the marginal utility per hour spent on English d. he spends twice as much time on calculus as on English e. he spends twice as much time on English as on calculus