List the four components of GDP
consumption, investment, government purchases, and net exports
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Now find the cost-effective solution.
Consider the environmental problem created by two paint companies that release chromium wastes into a nearby stream. The state authorities set a standard for the waterway that requires a combined abatement level (A) for chromium of 15 units. Suppose that the two firms, firm 1 and firm 2, face the following marginal abatement cost equations: MAC1 = 3.2A1 and MAC2 = 0.8A2, where costs are measured in thousands of dollars.
Optimal decisions are made
A) if information about prices and marginal utilities is known. B) in the marketplace. C) at the margin. D) when marginal utility is minimized.
The law of comparative advantage states that the person who should produce a good is the person who
a. has the lowest opportunity cost of producing that good b. can produce that good using the fewest resources c. will produce that good using the most expensive resources d. has the most desire for that good e. has produced that good in the past
If a 1 percent increase in the price of DVD players leads to a 3 percent reduction in the number of DVD players sold, we can conclude that
A. the demand for DVD players is relatively inelastic. B. the demand for DVD players is relatively elastic. C. DVD players are inferior goods. D. the supply of DVD players is perfectly inelastic.