Honey producers provide a positive externality to orchards because
a. the honey producers get more honey.
b. the orchard owner frequently gets stung by the honey producer's bees.
c. the orchard owner does not have to purchase bees to pollinate his flowers.
d. the honey producers have to rent access to the orchard grounds.
c
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If the production possibilities frontier for guns and butter is bowed outward from the origin, this indicates constant opportunity cost between the two goods.
Answer the following statement true (T) or false (F)
All of the following actions shift the aggregate demand curve to the right EXCEPT
A) the Fed raises the interest rate. B) an increase in government transfer payments. C) inflation is expected to rise next year. D) an increase in expected future profit. E) a decrease in taxes.
After a tariff is imposed on a good, the price of the good
A) does not change. B) falls. C) rises. D) rises only if the domestic demand for the good does not change. E) might rise, fall, or not change depending on whether the government did or did not simultaneously impose a quota.
Suppose the supply and demand of land for natural gas extraction are imperfectly elastic. Given that coal is a potential substitute for natural gas in energy applications, a change in the price of coal may shift the demand curve for natural gas
What happens to the economic rents assigned to land on which natural gas is extracted if the price of coal declines? A) Rents increase B) Rents are positive and remain unchanged C) Rents decrease D) Rents are zero before and after the change