Sam lives next to The Party Pub and its outdoor "beer garden" that features live music. An economics major, Sam considers this a positive externality. Dave, another economics student, lives next to The Party Pub too, but he considers the music a negative externality. Which student, if either, is correct? Why?
Both students are correct if they are accurately stating their preferences. Sam must enjoy live music. He can sit in his yard and enjoy these benefits without having to pay a cover charge. Dave, on the other hand, thinks the music a nuisance. It imposes a cost on him since he obviously values a quieter environment.
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Along the elastic portion of a demand curve, the
A. change in price will always be greater than the change in quantity demanded. B. percentage change in quantity demanded will be less than the percentage change in price. C. change in price will always be less than the change in quantity demanded. D. percentage change in price will be less than the percentage change in quantity demanded.
Income effect results in _____
a. a change in the elasticity of demand of a consumer b. a change in the buying power of consumers c. a change in the opportunity cost d. a change in the permanent income of a consumer
To own a taxicab in New York City, you must own a medallion. New York City regulates the number of official cabs by limiting the number of medallions. Explain why the New York cab industry is not competitive by reviewing the four conditions necessary for competition. NYC violates which one?
In terms of weekly earnings for full-time workers,
A. black workers earn about 77% of what white workers earn. B. black workers earn about 42% of what white workers earn. C. black workers earn about 58% of what white workers earn. D. black workers earn about the same as whites.