If the production of paper causes economic damage to a community, allowing the market to set the price of paper equal to the private marginal cost of producing paper will
a. generate less than the optimal quantity of paper produced
b. generate more than the optimal quantity of paper produced
c. generate an equilibrium price that is higher than the price associated with the market's most efficient level of output
d. cause some but not all paper producers to go out of business
e. benefit society because of externalities generated by the production
B
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Compare the macroeconomic performances in the 1990s of the following countries under the following exchange-rate regimes: floating exchange rates, Mexico and Brazil; capital control, China and Malaysia; and currency boards, Estonia and Hong Kong;
dollarization, Argentina.
Which of the following would slow down productivity growth?
a. A change in the composition of the workforce so that more middle-aged people and fewer young people are working b. A change in the composition of the workforce so that organizations hire more men who work steadily throughout the year than men who frequently enter and leave the workforce c. The quality of education remaining unchanged d. People starting to invest more in capital goods e. Firms starting to cut down the size of their labor force
Exhibit 7-1 Production of pizza data Workers Pizzas 0 0 1 4 2 10 3 15 4 18 5 19 Exhibit 7-1 shows the change in the production of pizzas as more workers are hired. The marginal product of the labor input begins to fall with the employment of the
A. first worker. B. second worker. C. third worker. D. fourth worker.
Economic profit in the long run is:
A. possible for both a pure monopoly and a pure competitor. B. possible for a pure monopoly but not for a pure competitor. C. impossible for both a pure monopolist and a pure competitor. D. only possible when barriers to entry are nonexistent.