Refer to the graph below. The slope of the line tangent to the curve at point A is:
A. 0
B. .5
C. 2
D. 4
Answer: A
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Consider an industry that produces an output Q with marginal private cost (MC) and marginal social cost (MSC) as given in the table:
Q MC MSC 1 2 4 2 4 7 3 6 10 4 8 13 5 10 16 Which of the following is TRUE? A) The production of each additional unit results in a larger marginal external cost. B) The production of each additional unit results in the same marginal external cost. C) The production of each additional unit results in a lower marginal external cost. D) There are no marginal external costs associated with the production of this good.
The market price of an individual transferable quota is equal to the
A) marginal private benefit. B) marginal social benefit. C) marginal social benefit minus the marginal cost. D) marginal private benefit minus the marginal cost.
The absolute price elasticity of demand for a product that has many good substitutes is probably
A. infinity. B. less than 1. C. greater than 1. D. equal to 1.
Suppose there are two countries (country A and country B) each with its own currency (Currency A and Currency B). Suppose the exchange rate is expressed in terms of amount of Currency A needed to get Currency B. A strengthening of Currency A would show up as
A. an increase in the interest rate. B. an increase in the exchange rate. C. a decrease in the exchange rate. D. a decrease in the interest rate.