Refer to the figure below. From this graph, you can infer that paper production: 
A. generates no externalities at quantities less than 300 tons per day.
B. should be prohibited.
C. generates an external cost of $150 per ton per year.
D. generates an external cost of $50 per ton per year.
Answer: D
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Refer to Table 1-1. Using marginal analysis, by how many hours should Lydia extend her nail salon's hours of operations?
A) 2 hours B) 3 hours C) 4 hours D) 5 hours E) 6 hours
The supply of Thai baht in the foreign exchange market originates with:
a. tourists who go on vacation to Thailand. b. the export of Thai oranges and other goods. c. Thai residents who wish to purchase goods from other countries. d. the Thai royal family. e. Thai central bank intervention to stop the peseta from depreciating.
Other things equal, relatively poor countries tend to grow
a. slower than relatively rich countries; this is called the poverty trap. b. slower than relatively rich countries; this is called the fall-behind effect. c. faster than relatively rich countries; this is called the catch-up effect. d. faster than relatively rich countries; this is called the constant-returns-to-scale effect.
The marginal benefit of an action:
A. equals the additional benefit produced by extra units of X and tends to decrease as X increases. B. equals the additional benefit produced by the total units of X and tends to increase as X increases. C. equals the additional benefit produced by the total units of X and tends to decrease as X increases. D. equals the additional benefit produced by extra units of X and tends to increase as X increases.