Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The best point for society would be
A. at any of the labeled points, as all of the points represent an efficient allocation of resources.
B. either Point B or Point C, as the total amount being produced at either of these points is approximately the same.
C. Point C, as at this point there are approximately equal amounts of LCD and OLED televisions being produced.
D. indeterminate from this information, as we don't have any information about the society's desires.
Answer: D
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Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country B will tend to ________ and employment in country B will tend to ________
A) decrease; increase B) increase; decrease C) increase; increase D) decrease; decrease
Several firms want to be the only horse carriage service in a small tourist town and must pay the city for a license to operate as a monopoly. Competition among the potential firms will result in
A) bidding up the price of the license so that the winning firm makes $0 economic profit. B) the winning firm making an economic profit because it will be a price maker. C) the winning firm making an economic profit because it will have no competition. D) the winning firm making an economic profit because rent seeking cannot occur. E) a $0 economic profit because monopolies are illegal.
What happens to desired investment spending if the interest rate rises? Is this response relevant to the supply of loanable funds curve or the demand for loanable funds curve?
The insight that people can always arrive at efficient solutions to the problems caused by externalities if they can negotiate the purchase and sale of the right to perform activities that cause externalities is called the ________.
A. prisoner's dilemma B. Sherman Act C. Coase Theorem D. tragedy of the commons