Over time, GDP may increase as the result of either (i) expansion in the quantities of goods produced or (ii) higher prices. Which of the following is true
What will be an ideal response?
(i) will generally increase living standards, but (ii) will not
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A Pigouvian subsidy
a. cannot achieve an efficient outcome b. is a per-unit payment on a good that is set equal to the marginal external benefit at QE c. achieves efficiency as long as it is set equal to the MEC at the competitive output level d. lowers the MPB vertically by the amount of the subsidy
The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts.
What is the maximum price that any buyer would be willing to pay for the first unit?
A. 15 B. 25 C. 35 D. 40
Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consumer goods200 180 140 80 0 In Exhibit 2-4, if the economy chooses production possibility D rather than production possibility B, it can expect
A. less growth in the future because it will use up its consumer goods. B. more growth in the future because of the accumulation of capital. C. the same amount of growth in the future but with a lower standard of living. D. the same amount of growth in the future but with a higher standard of living.
If the government taxes a steel company by an amount equal to the damages of each marginal ton of steel, then the steel company's marginal cost curve is the same as the marginal
A. private cost curve. B. social cost curve. C. damage cost curve. D. benefit cost curve.