The president of the United States promises that the nation's economy will simultaneously produce more defense goods without any decreases in the production of other goods. Under which of the following conditions could such a promise be valid?
A) if the United States were producing at a point on its production possibilities curve
B) if the United States were producing inside its production possibilities curve
C) if the United States were producing to the right of its production possibilities curve
D) None of the above; the production possibilities curve must shift to the right.
B
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The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour
A) will increase the quantity of labor employed. B) will leave unchanged the quantity of labor employed. C) will decrease the quantity of labor employed. D) could increase, decrease, or leave unchanged the quantity of labor employed.
In general, pollution is economically inefficient because _____
a. people do not like breathing bad air b. it is a byproduct of a market exchange c. producers are only pursuing their own self-interests d. producers do not have to internalize the opportunity cost of clean air
Consider a competitive market in which people consume at the point where their marginal rates of substitution between products X and Y are 3/5
In this same market, producers produce where their marginal rates of transformation between X and Y are also 3/5. However, producers are producing 7 of Y and 3 of X, and consumers wish to consume 5 of Y and 5 of X per unit of time. Explain how this situation can exist. Also determine if it represents an equilibrium or not. If not an equilibrium, what will tend to happen in the market?
According to the above table, if the marginal revenue product is $48, how many workers will the profit maximizing monopsonist hire?
A) 5 B) 6 C) 7 D) 8