A large aircraft manufacturer, like Boeing, may have a cost advantage over a new smaller manufacturer because of:
a. diseconomies of scale.
b. economies of scale.
c. diminishing returns to a fixed factor of production.
d. the principal agent problem is generally less severe for larger firms.
b
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The marginal benefit of a worker to a firm is the value of the extra output that results when
A) work is outsourced to a foreign country. B) workers get paid for working overtime. C) some workers are laid off and the remaining workers become more productive. D) an additional worker is hired.
Refer to Figure 5-11. S1 represents the supply curve that reflects the private cost of production and S2 represents the supply curve that reflects the social cost of production
One way to internalize the external cost generated by utilities is to impose a Pigovian tax on the production of electricity. What is the size of the Pigovian tax that will internalize the cost of the externality? A) P2-P0 B) P1-P0 C) P2-P1 D) P0
If Don paints the outside of his house a horrendous color: a. he probably has lowered the value of his home, but not that of his neighbors' homes
b. he probably has lowered the value of his home and the value of his neighbors' homes. c. he probably has lowered the value of his neighbors' homes but not the value of his own home. d. none of the above
Suppose United States net exports are -$50 billion. Then the dollar depreciates. In the short run, the United States may move downward along the J-curve, with net exports _________ and the AD curve shifting to the _______________
A) coming closer to zero; left B) coming closer to zero; right C) moving further from zero; left D) moving further from zero; right