A person can cause a negative externality by
a. becoming immunized
b. talking loudly in a restaurant
c. landscaping her lawn
d. paying taxes
e. attending school
B
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Use the following graph of an oligopolistic firm.
Suppose all firms within the cartel have identical costs of production. The cartel is earning
A. accounting profit but not economic profit. B. zero economic profit. C. economic profit. D. negative economic profit.
If a natural disaster destroys some of the capital stock, then the classical model predicts
a. labor demand, real wages, and output will fall. b. labor demand and real wages will rise, output will fall. c. the labor market remains unchanged but output falls. d. None of the above
If total profit is at a maximum, then average profit is zero.
Answer the following statement true (T) or false (F)
Consider a graph on which one good Y is on the vertical axis and the only other good X is on the horizontal axis
On this graph the income-consumption curve has a positive slope for low incomes, then it takes a zero slope for a higher income, and then it takes a negative slope for even higher incomes (the curve looks like an arc, first rising and then falling as income increases). This curve illustrates that, for all income levels, A) both X and Y are normal. B) only Y is normal. C) both X and Y are inferior. D) only X is normal.