Bart operates a lemonade stand in front of his house. His father works at the Springfield Nuclear Power Plant. Which of the following is most likely to be true?
a. The long run is the same for the power plant as it is for the lemonade stand.
b. The long run is longer for the power plant than it is for the lemonade stand.
c. The long run is shorter for the power plant than it is for the lemonade stand.
d. We cannot compare the long runs because these are different businesses.
e. It's impossible for the power plant short run to be shorter than the lemonade stand's long run.
B
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In the general textbook treatment, the firm's short run average variable and average total cost curves are U-shaped, while the average fixed cost curve is downward sloping over the entire range of output. Explain why
What will be an ideal response?
Keynes argued that the economy naturally achieves full employment because supply creates its own demand
a. True b. False Indicate whether the statement is true or false
The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth and which protects humans from ultraviolet radiation. Output of this substance has been restricted by a licensing system where producers have to bid in the open market for licenses to produce them in specified quantities. This is an example of
dealing with externalities by a. voluntary compliance. b. direct controls. c. taxes. d. the market mechanism.
Singapore has a system of traffic regulation called Electronic Road Pricing, in which traffic congestion is reduced by charging motorists who drive into the city center during certain hours of the day. Charging for use of a road is:
A. a quantity restriction, as the system involves charging motorists only if they drive into the city center during "certain hours" of the day. B. a price ceiling that reduces the excess demand for road usage. C. shifting from a third-party-payer-market to one in which individual consumers have to pay for their consumption of road usage, thus seeking to reduce excess demand. D. a price floor that eases the shortage caused by the natural limit to how much roads can be built in a certain geographic area.