Instead of throwing away a worn-out pair of jeans, a cowboy trades them in for $12 . The jeans are resold for $45 to someone who likes to project a rugged image. These transactions are Pareto improvements
a. True
b. False
A
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Which of the following statements is NOT compatible with explanations for why peak-load pricing is more profitable than charging a single price?
A) Consumer willingness to pay for the product varies a lot across different time periods. B) Marginal cost of production is much higher under peak demand. C) Marginal revenue changes a lot across different time periods. D) Marginal revenue must be the same across different time periods.
Nancy loves to landscape her yard, but her neighbor Tom places a low value on his landscaping. When Tom's grass is neglected and gets long, Nancy will mow for Tom. This is an example of: a. the fallacy of composition
b. a pollution tax. c. a private solution to a negative externality problem. d. how lazy Tom is.
Destruction of significant infrastructure will result in a country's production possibilities frontier: a. becoming steeper. b. becoming flatter
c. shifting inward. d. shifting outward.
Suppose the South had won the Civil War, and trade no longer took place between Northern and Southern states. Explain whether the sum of the North and South GDPs would have been higher or lower than with the current United States.
What will be an ideal response?