Answer the following statement(s) true (T) or false (F)
1. You can often predict people’s behavior if you know what their incentives are.
2. Lower prices are negative incentives to producers but positive incentives to consumers.
3. Positive incentives are generally considered more effective than negative incentives.
4. An absolute advantage occurs when a person, a region, or country can produce a good or service at a lower opportunity cost than others.
1. True
2. True
3. False
4. False
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The marginal social benefit (MSB) of abatement represents
a. the additional gains to society from reducing pollution b. the reduction in damages from abatement c. society's demand for abatement or environmental quality d. all of the above
Refer to Figure 2-1. Point A is
A) technically efficient. B) unattainable with current resources. C) inefficient in that not all resources are being used. D) the equilibrium output combination.
In economics, the term ________ means "additional" or "extra."
A) allocative B) equity C) marginal D) optimal
How does the leftward shift of the supply curve in graph 2 affect the individual firm shown in graph 1?
a. It causes the firm’s quantity of sales to decrease.
b. It causes the firm’s product price to increase.
c. It causes the firm to dip below its average total cost.
d. It causes the demand for the firm’s products to decrease.