If Jessie studies economics for two hours instead of going to the movies with her friends, then
A) the benefit of studying is the missed movie.
B) the opportunity cost of studying is the missed movie.
C) Jesse definitely is making a rational choice.
D) Jessie is ignoring a sunk cost.
E) Jessie is not responding to any incentives.
B
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The use of tariffs and quotas for trade protection results in
A. lower prices for domestic consumers. B. less revenue for the government. C. less rent-seeking activity. D. less efficiency in the economy.
Explain why a subsidy will not solve the problem of producing less than is socially optimal of a pure public good
Suppose that a firm produces electricity by burning coal. The production process creates a negative externality of air pollution. If the firm does not internalize the cost of the externality, it will produce where
a. the value of electricity to consumers equals the private cost of producing electricity. b. the value of electricity to consumers equals the social cost of producing electricity. c. the cost of the externality is maximized. d. the transaction costs of private bargaining are minimized.
How much is induced consumption when disposable income is $3 trillion?
A. 0
B. $1 trillion
C. $1.5 trillion
D. $2.5 trillion