When voting mechanisms substitute for the market mechanism in allocating resources, we are relying on
A. Public choice theory.
B. Cost-benefit analysis.
C. Ballot box economics.
D. Opportunity cost analysis.
Answer: C
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Ayanna grows herbs. Last year she grew 2,000 pounds of herbs in a year while using 250 square feet of land and 1 worker. This year she doubled her land to 500 square feet, doubled her workers to 2, and grew 4,500 pounds of herbs
She sells her rare, organic herbs for $50 a pound. She pays her workers $25,000 a year and rents her land for $100 per square foot for a year. These are her only costs. a) What was Ayanna's total cost last year and this year? b) What was Ayanna's average total cost last year and this year? c) Did Ayanna experience economies or diseconomies of scale?
If the production of a particular good causes a negative externality, would the equilibrium quantity in a competitive market be less than the efficient quantity or would it be greater than the efficient quantity?
What will be an ideal response?
Assume for the United States that the opportunity cost of each airplane is 50 cars. Which of these pairs of points could be on the United States' production possibilities frontier?
a. (200 airplanes, 5,000 cars) and (150 airplanes, 4,000 cars) b. (200 airplanes, 12,500 cars) and (150 airplanes, 15,000 cars) c. (300 airplanes, 15,000 cars) and (200 airplanes, 25,000 cars) d. (300 airplanes, 25,000 cars) and (200 airplanes, 40,000 cars)
If your neighbors remove the weeds in their yard and this activity prevents weed seeds from blowing into your yard, the benefit you receive is a public good.
Answer the following statement true (T) or false (F)