If a negative externality is to be internalized to the decision maker, the:
A. consumer of the good should pay a tax equal to the marginal benefit to those outside the trade that results from consuming the good.
B. producers' marginal costs should be reduced by an amount equal to the marginal cost to those outside the trade that results from production of the good.
C. producers' marginal costs should be increased by an amount equal to the marginal cost to those outside the trade that results from production of the good.
D. consumer of the good should receive a subsidy equal to the marginal cost to those outside the trade that results from production of the good.
Answer: C
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A firm hires labor in a perfectly competitive labor market. If the wage rate is $44, the firm should hire
a. 44 workers b. all units of labor whose marginal product is 44 c. all units of labor whose marginal revenue product is $44 d. all units of labor whose marginal revenue product is greater than or equal to $44 e. all units of labor whose marginal revenue product is less than or equal to $44
The economizing problem is essentially one of deciding how to make the best use of
A) unlimited resources to satisfy limited wants. B) unlimited resources to satisfy unlimited wants. C) limited resources to satisfy limited wants. D) limited resources to satisfy virtually unlimited wants.
Temporary monopolies via the provision of sole ownership rights to profit from the production, use, or sale of a good are provided by:
A. profit-maximizing behavior. B. network externalities. C. patents and copyrights. D. natural monopolies.
Refer to the diagrams. In which case would the coefficient of cross elasticity of demand be positive?
A. A
B. B
C. C
D. D