The positive externality associated with education is:
a. producers can get higher prices for their goods and services.
b. less crowding in the classrooms.
c. increases in societal well-being and economic growth.
d. technological progress slows as basic research increases.
e. the market excludes noncontributors to education from benefits.
c
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Real economic activity at full employment is unaffected by changes in investment spending when
A) interest rates are low. B) velocity is flexible. C) inventories are low. D) prices are flexible.
Suppose Kate's Great Crete (KGC) has annual variable costs of VC = 30Q + 0.0025Q2 and marginal costs of MC = 30 + 0.005Q, where Q is the number of cubic yards of concrete it produces per year. In addition, it has an avoidable fixed cost of $50,000 per year. KGC's demand function is Qd = 20,000 - 400P. What is KGC's profit at the profit maximizing sales price?
A. $30,000 B. $90,000 C. $120,000 D. -$30,000
Answer the following statement(s) true (T) or false (F)
1. In a contestable market with room for many firms, industry output will be the same as in a successful cartel. 2. The Cournot oligopoly model is based on the assumption that firms treat their rivals' output as fixed and given. 3. Firms' total output is higher in the Cournot oligopoly model than in the Bertrand oligopoly model. 4. In both competition and monopolistic competition, free entry and exit guarantee that the industry's output is produced at the least possible cost. 5. Social welfare would be increased if a monopolistically competitive industry were replaced with a competitive industry.
According to data on Pennsylvania agriculture in the 18th century, increases in productivity were primarily due to:
a. increases in average farm size. b. increases in the amount of labor per farm. c. decreases in the land-labor ratio d. increases in the capital-labor ratio.