Which of these activities will most likely impose an external cost?
a. An athlete works out at a gym.
b. A secretary smokes a cigarette in a crowded break room.
c. A young mother pushes her baby in a stroller.
d. A construction worker eats a hotdog during his lunch break.
b
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Derived demand:
A. is the sum total of all factors of production for a given good or service. B. is only computed for the long-run demand decisions based on short-run marginal changes. C. refers to the demand for variable inputs when at least one fixed input exists. D. refers to the supply decisions of a final good influencing the demand for the inputs needed to make it.
If the growth rate for GDP was 5 percent and GDP in year 1 was 140, then GDP in year 2 would be:
A. 133.3. B. 135. C. 145. D. 147.
Refer to Figure 29.2 for Farmer Sanchez with a price floor set above the market price. Assume the price support is located at the minimum point on the farmer's ATC curve. If this support is eliminated, Farmer Sanchez may do all of the following except
A. Shut down in the short run if price is below the minimum AVC. B. Increase production. C. Leave the market. D. Reduce costs by investing in new technology.
Graphical analysis of tariffs reveals that:
A. they benefit domestic consumers at the expense of domestic producers. B. revenue gains outweigh the costs to domestic consumers. C. they increase domestic production of the good for which imports face tariffs. D. although the benefits are not shared equally, everyone in the domestic economy benefits from tariffs.