Suppose people value clean air more as their incomes increase. What would happen to the optimal amount of clean air as a country develops economically? Is there an economic prediction we can make from this?
What will be an ideal response?
The optimal amount of clean air would increase because the marginal benefit curve of clean air would shift out as incomes rose. We would expect richer countries to spend more on air pollution clean up than poorer countries.
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A decrease in the demand for recreational fishing boats might be caused by an increase in the:
A. income of sports fishers. B. price of outboard motors. C. size and number of fish available. D. price of sailing boats.
The barrier to entry that sustains a natural monopoly is:
A. economies of scale. B. implicit price fixing agreements. C. government regulation. D. patent protection.
Which of the following is NOT a voluntary exchange?
A. Jason pays $20,000 for tuition and fees this semester. B. Jose loses his smartphone on the way home. C. Emily buys a $500 plane ticket to fly from Miami to Dallas on short notice. D. Marie buys groceries.
If you are earning $20,000 this year and the CPI is 165, your real income in base year prices is
A) $121.21. B) $12,121.21. C) $20,000. D) $16,500. E) $33,000.