Which of the following is observed in an economy during the contraction phase of the business cycle?
a. Nominal GDP begins to rise
b. Real GDP remains constant
c. Real GDP falls
d. Productivity of resources increase
e. Unemployment falls
c
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The above figure shows the market for fertilizer. When fertilizer is applied to lawns, it runs off into neighboring streams and ponds, killing fish and creating an external cost
a) What is the equilibrium price and quantity of fertilizer in an unregulated, competitive market? b) What is the efficient quantity of fertilizer? c) Suppose government imposes a tax equal to the marginal external cost. What is the equilibrium price paid by consumers and the equilibrium quantity after implementation of the tax? d) At the output level in part (c), how much is the tax? e) How much tax revenue does government collect? f) What is the deadweight loss borne by society if the externality is left uncorrected?
Economic activity initiated by market participants imposes costs on free riders
Indicate whether the statement is true or false
Which of the following conditions indicate cost minimization, assuming two inputs, labour (L) and capital (K)?
a) MPL = MPK b) MPK/PL = MPL/PK c) PK · MPK = PL · MPL d) PK = PL e) MPK/PK= MPL/PL
In the above table, if the marginal factor cost is $960, how many workers would be hired?
A. 3 B. 2 C. 4 D. 5