Marginal cost equals
a. total cost divided by quantity of output produced.
b. total output divided by the change in total cost.
c. the slope of the total cost curve.
d. the slope of the line drawn from the origin to the total cost curve.
c
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Refer to A Negative Externality Problem. Suppose there is no attempt to internalize the externality. Pigovian analysis indicates that the externality creates a deadweight loss equal to
Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation. a. $0 b. $25 c. $50 d. $100
What does a productivity curve reflect? What leads to movements along a productivity curve and what leads to shifts in a productivity curve?
What will be an ideal response?
A debt contract is incentive compatible
A) if the borrower has the incentive to behave in the way that the lender expects and desires, since doing otherwise jeopardizes the borrower's net worth in the business. B) if the borrower's net worth is sufficiently low so that the lender's risk of moral hazard is significantly reduced. C) if the debt contract is treated like an equity. D) if the lender has the incentive to behave in the way that the borrower expects and desires.
Refer to the information provided in Figure 16.2 below to answer the question(s) that follow.
Figure 16.2Refer to Figure 16.2. The ________ amount of cars is 25.
A. efficient B. subsidized C. break-even D. unregulated