Marginal revenue product is
A. marginal physical product multiplied by marginal revenue.
B. the total revenue from the sale of the product sales.
C. marginal physical product multiplied by average variable cost of the product.
D. the price of the product.
Answer: A
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Low Bar Steel factory produces runoff that affects the water supply in one way or another for more than 100,000 households and businesses. Why would it be impractical for the Coase theorem to apply to a workable solution in this case?
a. Potential benefits outweigh the costs. b. There is no externality. c. There are too many transactors. d. Property rights are clearly defined.
A country can actually improve its well-being if it is in a position to impose a non-zero "optimal tariff." Explain what an optimal tariff is, what conditions must be in place to implement an optimal tariff, and how such a tariff will increase national welfare. Assuming a country could impose an optimal tariff, would you suggest it do so? Justify your answer.
What will be an ideal response?
According to Keynesians, an increase in the money supply will have its least impact on GDP when the aggregate demand curve intersects:
A. the horizontal portion of the aggregate supply curve. B. the vertical portion of the aggregate supply curve. C. the upward sloping portion of the aggregate supply curve. D. either the horizontal or upward sloping portion of the aggregate supply curve.
Which of the following gives rise to a positive externality?
A) Sudden increase in the price of oil due to a supply shock B) Sudden increase in the demand for diamonds leading to an increase in their price C) Deforestation leading to the extinction of many species D) Consumption of a drug to cure a communicable disease