Long Beach Island, off the coast of New Jersey, is considering building a sand barrier to protect the houses on the island from future hurricanes. The marginal social benefit of the barrier is equal to the
A) marginal private benefit of the person who benefits the most from the barrier.
B) marginal private benefit of the person who benefits the least from the barrier.
C) sum of the marginal private benefits for anyone who benefits from the barrier.
D) difference between the marginal private benefit of the person who benefits the most and the person who benefits the least from the barrier.
C
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An efficient market is one in which
a. no rents are created. b. past prices can be used to predict the levels of future prices. c. the principals can fully monitor the actions of their agents. d. the price fully reflects all available information.
How can external costs be eliminated by assigning property rights?
What will be an ideal response?
With respect to how economists study the economy, which of the following statements is most accurate?
a. Economists study the past, but they do not try to predict the future. b. Economists use "rules of thumb" to predict the future. c. Economists devise theories, collect data, and analyze the data to test the theories. d. Economists use controlled experiments in much the same way that biologists and physicists do.
Juanita makes $36 an hour at work. She has to take time off work to purchase her dress, so each hour away from work costs her $36 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
