Your neighbor in an apartment complex plays his music very loudly late at night, which makes it difficult for you to get to sleep. You offer the neighbor $50, the monetary value you put on your sleep, to never play his music between midnight and 7 AM. By doing so
A. you have indicated a willingness to make the external cost a social cost.
B. you have indicated the cost of the externality. The externality is not internalized even if he accepts your offer.
C. you have indicated the cost of the externality, which internalizes the externality.
D. you have failed to bring about an efficient solution since you should have complained to the police.
Answer: C
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Refer to the above diagram. At output level Q total variable cost is:
A. 0BEQ. B. BCDE. C. 0AFQ. D. 0CDQ.
The alternative combinations of two goods that a consumer can purchase with a specific money income is shown by
What will be an ideal response?
Suppose that Figure 10.4 shows a monopolist's demand curve, marginal revenue, and its costs. At the profit-maximizing output level, the monopolist's profit would be:
A. $730. B. $570. C. $320. D. $150.
The Golden Rule capital-labor ratio is the level of the capital-labor ratio that, in the steady state,
A. maximizes consumption per worker. B. maximizes capital per worker. C. maximizes output per worker. D. maximizes investment per worker.