Refer to the above figures. Which of the panels would be consistent with the situation in which external costs exist?
A) Panel 1
B) Panel 2
C) Panels 1 and 2
D) neither panel
A
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Average total cost is equal to
a. AFC + AVC. b. AFC/total output. c. AFC/AVC. d. AVC/AFC.
The estimates of the magnitude of government spending increase needed to have ended the 2007-2009 recession in the United States vary, based on the actual size of the expenditure multiplier, and range from
A) $250 million to $1 billion. B) $50 billion to $250 billion. C) $400 billion to $2.5 trillion. D) $5 trillion to $15 trillion.
If the government's provision of a subsidy is too large to counteract the entire effect of a positive externality, the:
A. quantity consumed will become even lower. B. quantity consumed will become too high. C. total surplus will be maximized. D. None of these statements is true.
If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then
a. Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria. b. Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. c. Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria. d. Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria.