A town engineer comes to the city council with a proposal to install a traffic light at a certain intersection that currently has a stop sign. The benefit of the traffic light is increased safety because the light will reduce the incidence of fatal traffic accidents by 50 percent per year. Which of the following statements is correct?
a. The city council should vote to install the traffic light because the benefits will outweigh the costs.
b. The city council should carefully evaluate the benefits of reduced fatalities against only the explicit costs of the light.
c. The city council should carefully evaluate the benefits of reduced fatalities against the costs of the light and of the extra time that drivers will spend waiting for a green light.
d. The costs will invariably outweigh the benefits.
c
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If rice is an inferior good,
a. the income elasticity of demand for rice will be positive. b. an increase in income will cause the demand curve for rice to shift to the left. c. an increase in income will cause consumers to buy more rice at the current market price. d. a reduction in income would not affect the demand for rice, but it would increase the quantity demanded.
The profit-maximizing level of employment for a price-taking firm occurs where marginal revenue product equals marginal resource cost. In contrast, the profit-maximizing level of employment for a price-setting firm occurs where marginal product equals marginal resource cost
Indicate whether the statement is true or false
According to the following figure, what could have caused a consumer's budget line to shift from ML to MN?
A. a decrease in the price of Y B. a decrease in the price of X C. an increase in the price of Y D. an increase in the price of X E. cannot determine without more information
In feudalism, serfdom was maintained primarily through:
A. market forces. B. supply and demand. C. tradition. D. economic forces.