The figure above shows the market for a good with an external benefit. When 6 units are produced, marginal social benefit equals ________ and marginal external benefit equals ________
A) $200; $150
B) $350; $200
C) $200; $50
D) $350; $150
E) $150; $250
D
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Which of the following is an example of an innovation that can lead to new investment and spur the economic growth of a nation?
a. Horizontal drilling and hydraulic fracturing resulting in the discovery of new sources of shale gas in the U.S. b. Outsourcing the manufacturing units of a U.S. shoe-making company, resulting in the reduction of overhead costs c. A tire manufacturer laying off some of its workers to increase its profit margin d. An automobile-manufacturing company using cheaper machines for its main product line
Among developed economies, the natural rate of unemployment
a) is a fixed number b) tends to follow a steady upward trend c) varies, but less the actual unemployment d) varies more the actual unemployment e) tends to follow a steady downward trend
If you were told the MPC was = 0.75 and the government engaged in a tax decrease of $400B, then the overall change in GDP would be:
A. $1200B B. $400B. C. $300B. D. $1600B.
Under rate-of-return regulation, average cost pricing
A) is inflated so the firm can make economic profits. B) includes variable costs but not a cost for capital. C) includes what they consider to be a fair rate of return on investment. D) includes a cost for capital that generates an above normal rate of return.