Suppose there are two factories on a river, and both need clean water for their production processes. The upstream factory takes in clean water and dumps dirty water back into the river
The downstream firm must clean up the water it gets from the river before using it. In this situation A) the private costs of the downstream factory are more than the private costs of the upstream factory, but for both factories private costs and social costs are the same.
B) the social costs are greater than the private costs for the upstream firm, while the social costs are less than the private costs for the downstream firm.
C) the upstream factory's private costs are less than its social costs, and its external costs are borne by the downstream factory.
D) the internal costs of the upstream factory are externalized by the downstream factory, which then passes them on to its customers.
C
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If a perfectly competitive industry is taken over by a monopolist, the market price will rise
a. due to improvements in technology b. assuming that technology is unchanged c. and output will rise d. unless barriers to entry are imposed e. until they equal marginal revenue
Which of the following best describes the notion of full employment?
(a) Less than 5% of the labour force is unemployed; (b) The current level of employment that is sustainable; (c) Employment and unemployment are at their "natural" rates; (d) All of the above could describe it.
An example of a common resource is
A. college education. B. a public parking lot. C. airline travel. D. a private beach.
The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal private cost is
A) zero. B) $14,000. C) $19,000. D) $16,000.