Which of the following describes how a negative externality affects a competitive market?
A) The externality causes a difference between the private cost of production and the private benefit from consumption.
B) The externality causes consumer surplus to exceed producer surplus.
C) The externality causes a difference between the private cost of production and the equilibrium price.
D) The externality causes a difference between the private cost of production and the social cost.
D
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The purchase of a computer by a person for household use would be counted in what category of GDP?
A. The purchase is included as part of investment. B. The purchase is not included in GDP at all, but the value of services the computer gives is included in consumption each year. C. The purchase is counted as consumption if the computer was manufactured in the United States; otherwise, it is ignored. D. The purchase is always counted as consumption.
An example of an increase in b, the efficiency of human capital accumulation, is
A) more mandatory school years. B) better teachers. C) better school material. D) better total factor productivity.
The law firm of Cheep, Cheeper, and Cheeperstill offers a salary of $35,000 to first-year lawyers. This firm will attract applications from
a. exactly the number of lawyers the firm wishes to hire b. many lawyers whose marginal revenue product is greater than $35,000 c. many lawyers whose marginal revenue product is less than $35,000 d. only lawyers whose marginal revenue product is equal to $35,000 e. many lawyers whose marginal revenue cost is equal to $35,000
A decrease in the number of sellers in the market causes a. the supply curve to shift to the left
b. the supply curve to shift to the right. c. a movement up and to the right along a stationary supply curve. d. a movement downward and to the left along a stationary supply curve.