Which of the following activities can give rise to a positive externality?
A) Jogging every morning
B) Getting a flu vaccination
C) Consuming herbal products
D) Buying a pair of gloves
B
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Identify markets in which there is an exchange
What will be an ideal response?
Suppose your tastes are defined by the utility function 
.
a. Suppose your income is $1,000, the price of 
is 1 and the price of 
style="vertical-align: -7px;" width="15px" height="20px" align="absmiddle" /> is 
. Set up your utility maximization problem.
b. Derive the quantity of 
you will consume.
c. What happens to your consumption of 
if 
increases?
d. Now suppose that your and my tastes are captured by the utility function 
, with the parameter 
different for you than it is for me. When 
increases, you consume more 
than before and I consume less. What range of 
is consistent with your behavior, and what range is consistent with mine? Use your answer to (b) to explain.
What will be an ideal response?
A decision to increase the parameter ? in the MP curve is an example of ________
A) autonomous easing B) leftward movement along the curve C) rightward movement along the curve D) endogenous response E) autonomous tightening
A notion that supports the idea that some items should be distributed equally to all is known as
A. Pareto efficiency. B. the Hoover Principle. C. poverty gap closing. D. commodity egalitarianism.