The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then without government intervention
A) no students will go to college.
B) less than 10 million students will go to college.
C) 10 million students will go to college.
D) more than 10 million students will go to college.
C
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Refer to Table 2-9. Does either Japan or Thailand have an absolute advantage and if so, in what product?
A) Thailand has an absolute advantage in rice. B) Japan has an absolute advantage in wristwatches. C) Japan has an absolute advantage in rice. D) Thailand has an absolute advantage in both products.
Explain what will happen to the equilibrium real wage and quantity of labor for each of the following scenarios, and use a graph of the aggregate labor market to show the changes
a. The government decreases income tax rates. b. The skill level of workers increases. c. A hurricane destroys a large portion of the capital stock. d. Workers increase their preference of labor over leisure. e. A technological change occurs that increases the productivity of all workers, and at the same time the government increases income tax rates. f. The overall skill level of workers decreases, and at the same time household wealth increases.
Cost-benefit analysis is just a guide to making a normative decision
a. True b. False
Adam Smith believed that if people were free to pursue their own interests,
a. public interest would be served quite well. b. less would be produced than if altruism were the guiding principle. c. they would generally apply their talents to unproductive activities that would generate little value to society. d. they would have little incentive to undertake productive activities.