Suppose a paper mill emits noxious odors that represent a negative externality for people living near the plant
If the plant managers ignore these external effects on their neighbors, what is the efficiency character of the resulting market outcome? A) The plant generates too much paper due to incomplete information.
B) The plant generates too much paper because the odors are nonexclusive.
C) The plant generates too much paper because the managers ignore the external costs of the air pollution on the neighbors.
D) The market outcome is efficient.
C
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Why might governments choose to dispense with the market mechanism for directing development? What problems will arise?
What will be an ideal response?
What important lesson did American economists learn in the 1980s and again in 2001-2003?
a. Large tax cuts can lead to a balance of trade surplus. b. Large government budget deficits can crowd out consumption. c. Large government budget deficits can bankrupt the nation. d. Large government budget deficits can crowd out net exports.
The competitive firm's profit-maximizing quantity of labor is the quantity where the:
A. value of the marginal product of labor is equal to the profit. B. quantity of the marginal product of labor is equal to the market wage. C. quantity of the marginal product of labor is equal to zero. D. value of the marginal product of labor is equal to the market wage.
The consumer price index is used to monitor changes in the cost of living over time.
Indicate whether the statement is true or false.