The pig farm industry is perfectly competitive and causes pollution to the surrounding air and water. Which of the following is true?
A. Since the industry is perfectly competitive, price and quantity are at the socially efficient levels.
B. The competitive price is higher and quantity lower than the socially efficient point.
C. The competitive price is higher and quantity higher than the socially efficient point.
D. The competitive price is lower and quantity higher than the socially efficient point.
Answer: D
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Which of the following statements is true?
A) An economy's production possibilities curve is convex to the origin. B) The opportunity cost of producing a good decreases as more resources are used for its production. C) The production possibilities curve of a country is fixed in the short run. D) The slope of the production possibilities curve represents the terms of trade between two states.
Instrument relevance
A) means that the instrument is one of the determinants of the dependent variable. B) is the same as instrument exogeneity. C) means that some of the variance in the regressor is related to variation in the instrument. D) is not possible since X and u are correlated and Z and u are not correlated.
Which of the following describes a situation where tax laws give preferential treatment to specific types of behavior?
a. tax evasion b. a political payoff c. a tax loophole d. compensation for the benefit of society
What is monopolistic competition?
a. Many companies selling similar but not identical products. b. A very few companies selling identical products. c. One company sells several different products under different names. d. One company sells the identical product under different names.