The total social costs of production are:
a. private costs plus private benefits.
b. private benefits minus private costs.
c. private costs plus external costs
d. private costs minus external costs.
c. private costs plus external costs
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Loud music from a neighbor's party is
A) a negative externality whether or not you like it. B) a positive externality whether or not you like it. C) a positive externality if you like the music, and a negative externality if you don't. D) a negative externality if you like the music, and a positive externality if you don't. E) not an externality.
Hannah's Harmonicas sells 1,000 harmonicas each month at a price of $10.00 each. (She could sell as many as she wishes at that price.) If the marginal cost of producing an additional harmonica is $9.60, then
a. Hannah should produce additional harmonicas b. Hannah could possibly reduce her profits by producing one additional harmonica c. Hannah must currently be maximizing her profits d. too many harmonicas are being produced, from society's point of view e. Hannah's total economic profit is $400 per month
An attempt to use government spending to boost the economy may bring
A. deflation. B. anarchy. C. inflation. D. fiscal instability.
Perry should specialize in the production of
A. both goods. B. poems. C. novels. D. neither good.