Which of the following is a determinant of productivity?
a. human capital per worker
b. physical capital per worker
c. natural resources per worker
d. All of the above are correct.
d
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Shelter for homeless people is an example of
A. something hard to find B. a want C. something they can live without D. a need
Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900. You may find it easier to answer the following questions if you fill in the payoff matrix below. 
width="383" />In this situation, the Nash equilibrium yields a: A. lower payoff than each would receive if each played his dominated strategy. B. the same payoff that each would receive if each played his dominated strategy. C. lower payoff than each would receive if each played his dominant strategy. D. higher payoff than each would receive if each played his dominant strategy.
A free market fails when
A) firms that produce goods which create positive externalities go bankrupt. B) firms that produce goods which create negative externalities earn high profits. C) there is an external effect in either production, consumption, or both. D) there is government intervention.
What is an externality? How do positive and negative externalities differ in their effects? How can government action correct positive and negative externalities?
What will be an ideal response?