Each citizen in a small town suffers 5 units of irritation for each bushel of leaves burned in the town. The charge for hauling a bushel of leaves to the land fill is a fee equal to 20 units of irritation. There are 25 people in the town, each of whom minimizes personal irritation and has 10 bushels of leaves. Propose two solutions for the town that will lead to efficiency.
What will be an ideal response?
If a law prohibiting burning were passed, everyone would be happier. Also if a tax of more than 15 units of irritation were passed the people would voluntarily haul their leaves to the land fill.
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Implicit costs are
A) costs that are measured in dollars. B) costs that do not involve an exchange of money. C) costs that typically involve the exchange of money. D) the same as explicit costs.
A manager in a corporation is likely to be
A) both a principal and an agent. B) neither a principal nor an agent. C) an agent but not a principal. D) a principal but not an agent.
A firm with a flat demand curve
A) has no brand loyalty. B) has weak brand loyalty. C) has strong brand loyalty. D) isn't really worried about brand loyalty; flat demand curves guarantee zero profit.
If the total amount of demand deposits in the country increases by $12,000 after the Fed purchases $6,000 in bonds, what is the required reserve ratio?
a. 0.4 b. 0.1 c. 0.2 d. 0.5 e. 0.3