Which of the following is an example of marginal analysis?
A) To determine the optimal number of workers, a firm calculates the net benefits of hiring an extra worker.
B) To determine the optimal amount of fertilizer to be used, a farmer calculates the total benefits of using a given amount of fertilizer.
C) To choose the optimal apartment to rent, an individual estimates the net benefits of renting an apartment close to his place of work.
D) To determine the optimal output that a firm should sell, the manager calculates the total revenue earned by selling different levels of output.
A
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A decrease in wealth ________ consumption expenditure and ________
A) increases; shifts the consumption function upward B) increases; shifts the consumption function downward C) decreases; results in a movement downward along the consumption function D) decreases; shifts the consumption function downward E) decreases; shifts the consumption function upward
Using an example, explain the difference between a labor-intensive technology and a capital-intensive technology
What will be an ideal response?
Effective methods of dealing with externalities would include
a. taxing firms that generate beneficial externalities. b. imposing fines equal to the difference between MSC and MPC on firms that generate beneficial externalities. c. giving a subsidy per unit equal to the difference between MSC and MPC to firms that generate beneficial externalities. d. restricting the output of firms that generate beneficial externalities.
In natural and platform monopolies, economists argue that regulation:
A. is not explicitly desirable, and society should rather rely on direct competitive forces. B. is desirable, and should involve strict enforcement. C. is irrelevant. D. should be heavily enforced by government.