Refer to Figure 19.2. With no budget constraint, a rational consumer will consume
A. 1 apple.
B. 0 apples.
C. 6 apples.
D. an infinite number of apples.
Answer: C
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If no beautification projects were undertaken in a city except by private individuals or firms, the city would almost surely be less beautiful than otherwise comparable cities because
A) aesthetic standards vary so widely. B) it is extremely difficult to induce people to pay on a voluntary basis for the pleasure they receive from urban beautification projects. C) people may enjoy beauty, but they are not willing to pay for it. D) private individuals and firms generate more external costs than benefits.
Based on Figure 6.1, given a tariff of $0.25 per bushel on soybean imports, how much will domestic production increase?
A) Domestic firms will increase output by 10 million bushels. B) Domestic firms will increase output by 20 million bushels. C) Domestic firms will increase output by 70 million bushels. D) Domestic firms' production will not be changed by the tariff.
The tendency for a resource that has no price to be used until its marginal benefit falls to zero is referred to as:
A. a positional arms race. B. the Coase theorem. C. the tragedy of the commons. D. a social norm.
A discretionary fiscal policy is a fiscal policy that...
What will be an ideal response?