"If an individual is to maximize the utility received from consumption, he or she should spend all available income. . . ." This statement assumes:
a. that saving is impossible.
b. that the individual is not satiated in any one good.
c. that no goods are "inferior."
d. that every good has a positive marginal utility.
a
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Refer to A Negative Externality Problem. Suppose there is no attempt to internalize the externality. Pigovian analysis indicates that the externality creates a deadweight loss equal to
Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation. a. $0 b. $25 c. $50 d. $100
What are two benefits of the new miles-per-gallon requirements? Are these benefits in someone's self-interest or in the social interest?
What will be an ideal response?
The notion of opportunity cost can be represented graphically by the
a. area inside the production possibilities frontier. b. slope of the production possibilities frontier. c. vertical distance from the horizontal axis to the production possibilities frontier. d. horizontal distance from the vertical axis to the production possibilities frontier. e. sum of the horizontal and vertical distances to the production possibilities frontier.
If Great Britain experiences higher rates of inflation than the United States over a long period of time, we should expect the British £ (pound) per U.S. $ (dollar) exchange rate to:
A. hold constant, there isn't any link between inflation and exchange rates. B. fluctuate in a narrow range set by the Bank of England. C. increase. D. decrease.