Which of the following is NOT a negative externality?
A. E-mail "spam" consisting of advertisements for goods and services
B. Low-flying aircraft creating noise over an otherwise quiet neighborhood
C. A household pet leaving waste on a public sidewalk
D. A homeowner failing to remove trash from his yard, leaving it as an unsightly eyesore in the neighborhood
Answer: A
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Constant returns to scale for a firm would imply that
A. doubling input usage results in more than double the output. B. doubling input usage results in less than double the output. C. doubling input usage results in doubling the output. D. there are decreasing costs per unit of output.
From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
A) Due to their differences in quality and performance, dealer bicycles are not close substitutes. B) The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. C) Dealers are small sellers and have little control over bicycle prices. D) A and B are correct. E) B and C are correct.
Reliable information is
a. costly for consumers, but not for producers b. costly for producers and consumers c. freely available d. costly for producers, but not for consumers e. not relevant to economic decision making
The business owner will try to maximize
A. profit per unit of output. B. total profit. C. total revenue. D. output.