A new technology is discovered which results in all new cars producing 50 percent less pollution. Which of the following is true?
A) Real GDP increases because the air is cleaner, but nominal GDP does not change since air is free.
B) GDP will increase to reflect the fact that the air we breathe is cleaner.
C) GDP will increase if there is an increase in the production cost and price of the car.
D) GDP increases anytime pollution is reduced.
E) GDP will decrease.
C
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The cost of producing an additional unit of a good or service that falls on people other than the producer is
A) the marginal cost. B) represented by the demand curve. C) represented by the supply curve. D) the marginal external cost. E) the marginal social cost.
If the demand faced by a firm is elastic, selling one less unit of output will
a. increase revenue. b. decrease revenue. c. keep revenues constant. d. decrease price.
If all land had equal productivity, then
a. land rent would increase b. differential land rents would not exist c. location rent would not exist d. locations rent would be everywhere the same e. differential rent would increase
The slope of the typical production possibilities curve:
A. is positive. B. increases as one moves southeast along the curve. C. is constant as one moves down the curve. D. decreases as one moves southeast along the curve.