The marginal benefit and marginal private cost curves for aphrodisiacs are given as follows:
MB = 200 - Q MPC = Q
In addition to private costs, there is a marginal external cost of $10 per unit of output. What is the efficient level of output?
A) 0
B) 55
C) 95
D) 100
E) none of the above
C
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Which of the following items will be included in official U.S. GDP statistics?
A. Robert paying Ted for a haircut in Chicago. B. Money spent to clean up a local toxic waste site in Ohio. C. The dollar value of the annoyance felt by local citizens living near a noisy airport in Georgia. D. Revenue generated by illegal marijuana growers in Oregon. E. Revenue generated by legal medical marijuana sales in California. F. Emily and Rhonda trading an hour of dance lessons for a haircut in Dallas.
Economic efficiency is achieved
a. automatically in a capitalist economy b. when every possible Pareto improvement is exploited c. when all markets are monopolized d. if income is fairly distributed e. whenever a voluntary transaction takes place
Which point shows where the United States economy was temporarily operating during World War II, when we had reduced the unemployment rate to about two percent?
A. Point A
B. Point B
C. Point C
D. Point D
Exchange rate fluctuations:
A. have important economic consequences. B. have currently undetermined economic consequences. C. have minor economic consequences. D. do not have economic consequences.