myeconlab

From the list​ below, select the variable that will cause the demand curve to​ shift: A. Consumer income B. The number of firms in the market C. Technology and productivity D. The cost of raw materials

A. Consumer income

The ​"burden" of the tax refers to the -importance of the tax in terms of government revenue. -distribution of a tax between consumers and producers. -allocation of the tax across the country. -consideration of a tax in terms of legislative purpose.

-allocation of the tax across the country.

What is economic​ efficiency? A. Economic efficiency is where consumer surplus and producer surplus are maximized. B. Economic efficiency is where government revenue is maximized. C. Economic efficiency is where producer surplus is maximized. D. Economic efficiency is where deadweight loss is maximized. E. Economic efficiency is where consumer surplus is maximized.

A. Economic efficiency is where consumer surplus and producer surplus are maximized.

When is market failure likely to​ arise? ​(Check all that​ apply.) A. Market failure is likely to arise when it is difficult to enforce property rights. B. Market failure is likely to arise from a market surplus. C. Market failure is likely to arise from a market shortage. D. Market failure is likely to arise when property rights are incomplete. E. Market failure is likely to arise from scarcity.

A. Market failure is likely to arise when it is difficult to enforce property rights. D. Market failure is likely to arise when property rights are incomplete.

Microsoft charges a price of​ $599 for a copy of Windows 7. Is this pricing decision​ rational? A. When we assume the managers at Microsoft have used all available information and have weighed all known benefits and​ costs, we are assuming rationality. B. ​Microsoft's choice cannot be​ rational: the price is clearly more than most people are willing and able to pay. C. ​Microsoft's choice was​ rational: the price will maximize profit. D. We cannot assume that this pricing decision was rational because we do not have enough information to make an assumption.

A. When we assume the managers at Microsoft have used all available information and have weighed all known benefits and​ costs, we are assuming rationality.

Excludability is the situation that occurs when A. anyone who does not pay for a good cannot consume it. .B. one​ person's consuming a unit of a good means no one else can consume it. C. one​ person's consumption does not interfere with another​ person's consumption. D. it is impossible to exclude others from consuming the​ good, whether they have paid for it or not.

A. anyone who does not pay for a good cannot consume it.

Suppose Wendy's hamburgers have many close substitutes available. If​ so, then an increase in the price of Wendy's hamburgers will likely A. decrease the quantity of Wendy's hamburgersdemanded by a relatively large amount. .B. not change the quantity of Wendy's hamburgers demanded. C. decrease the quantity of Wendy's hamburgers demanded by a relatively small amount. D. increase the quantity of Wendy's hamburgers demanded by a relatively small amount. E. increase the quantity of Wendy's hamburgers demanded by a relatively large amount.

A. decrease the quantity of Wendy's hamburgersdemanded by a relatively large amount.

the burden on these households could be most practically reduced by A. refunding some part of their higher tax payments to​ lower-income households. B. only charging the carbon tax to​ higher-income households. C. relieving them of the need to pay this tax. D. increasing tax rates for​ higher-income households.

A. refunding some part of their higher tax payments to​ lower-income households.

The law of demand is the A. rule​ that, holding everything else​ constant, when the price of a good​ falls, the quantity demanded will​ increase, and when the price of a good​ rises, the quantity demanded will decrease. .B. requirement that when analyzing the relationship between price and quantity​ demanded, other variables must be held constant. C. rule​ that, holding everything else​ constant, when the price of a good​ rises, the quantity demanded will​ increase, and when the price of a good​ falls, the quantity demanded will decrease. D. rule​ that, holding everything else​ constant, when the price of a good​ rises, the quantity demanded will​ increase, and when the price of a good​ falls, the quantity demanded will increase.

A. rule​ that, holding everything else​ constant, when the price of a good​ falls, the quantity demanded will​ increase, and when the price of a good​ rises, the quantity demanded will decrease.

The private benefit is​ ________, while the social benefit is​ ________. A. the benefit received by the consumer of a good or​ service; the total benefits from consuming the good or service B. the benefit received by the consumer of a good or​ service; the external benefit C. the total benefit from consuming the good or​ service; the benefit received by the consumer of a good or service D. None of the above.

A. the benefit received by the consumer of a good or​ service; the total benefits from consuming the good or service

Examples of transaction costs include ​(check all that​ apply): A. the cost of drafting a contract or agreement. B. the cost of monitoring an agreement. C. the cost of the externality. D. the time required to negotiate an agreement. E. the difference between the private costs and social costs of production.

A. the cost of drafting a contract or agreement. B. the cost of monitoring an agreement. D. the time required to negotiate an agreement.

Suppose alcohol generates a negative externality in consumption. If​ so, then A. the marginal social benefit of alcohol is less than the marginal private benefit. .B. the marginal social benefit of alcohol equals the marginal private benefit. C. the marginal social cost of alcohol equals the marginal social benefit. D. the marginal social cost of alcohol is greater than the marginal private cost. E. the marginal social benefit of alcohol is greater than the marginal private benefit

A. the marginal social benefit of alcohol is less than the marginal private benefit.

If a positive externality in consumption is present in a​ market, then A. the private benefit from consumption will be different than the social benefit from consumption. B. the private cost of production will be different than the social cost of production. C. the market will achieve economic efficiency. D. the private cost of production will be equal to the private benefit from consumption. E. the social cost of production will be equal to the social benefit from consumption.

A. the private benefit from consumption will be different than the social benefit from consumption.

A positive externality causes A. the social benefit from consuming the good to be greater than the private benefit. B. the social benefit from consuming the good to be the same as the private benefit. C. the social benefit from consuming the good to be less than the private benefit. D. None of the above.

A. the social benefit from consuming the good to be greater than the private benefit.

A producer or a consumer will internalize an externality because A. they have an incentive to consider the external effects of their actions due to taxes that are imposed or subsidies that they receive. B. they are compelled by law. Your answer is not correct.C. they face government regulation. D. they are driven by their individual moral codes

A. they have an incentive to consider the external effects of their actions due to taxes that are imposed or subsidies that they receive.

Which of the following best describes​ scarcity? A. Unlimited wants exceed the limited resources available. B.Prices of goods are very high. C. Markets cannot properly allocate resources. D. Wants cannot be fulfilled and thus all goods must be rationed.

A. Unlimited wants exceed the limited resources available.

The distinction between a normal and an inferior good is A. when income​ increases, demand for a normal good increases while demand for an inferior good falls. B. when income​ increases, demand for a normal good decreases while demand for an inferior good increases. C. normal goods are used together while inferior goods are used for the same purposes. D. normal goods are used for the same purposes while inferior goods are used together.

A. when income​ increases, demand for a normal good increases while demand for an inferior good falls.

The primary difference between absolute and comparative advantage is A. absolute advantage can never change while comparative advantage depends on the relative cost of a​ good's resources. B. absolute advantage refers to the ability to produce more of a good or service using the same amount of resources and comparative advantage refers to the ability to produce a good or service at a lower opportunity cost. .C. absolute advantage refers to the ability to produce a good or service at a lower opportunity cost and comparative advantage refers to the ability to produce more of a good or service using the same amount of resources. D. absolute advantage is a concept that was utilized in communist countries and comparative advantage is a capitalist idea.

B. absolute advantage refers to the ability to produce more of a good or service using the same amount of resources and comparative advantage refers to the ability to produce a good or service at a lower opportunity cost.

What is a market​ failure? A. A market failure is when the market fails to produce deadweight loss. B. A market failure is when the market fails to produce the efficient level of output. C. A market failure is when production occurs at high social cost. D. A market failure is when consumption occurs at low social benefit. E. All of the above.

B. A market failure is when the market fails to produce the efficient level of output.

A deadly hurricane caused substantial damage to corn produced in the eastern region of a small​ country, which is its main​ corn-producing belt. This resulted in acute shortage of corn in this country and the price increased. The government decided to introduce a price ceiling for corn in an attempt to prevent an abnormal price hike.​ Kyra, a student of​ economics, believed that this was not a good idea as it was likely to increase the shortage and create a huge deadweight loss. Her​ friend, Dona, however felt that the resultant deadweight loss may not be too high. Which of the​ following, if​ true, would support​ Dona's claim? A. The government is investing heavily in disaster management programs. B. Increased incidence of diabetes is causing many people to shift from corn to soybean consumption. .C. The price ceiling introduced is below the equilibrium price that prevailed prior to the hurricane. D. Other crops were also affected badly by the hurricane. E. The country is unable to import corn from neighboring countries which were also affected by the hurricane.

B. Increased incidence of diabetes is causing many people to shift from corn to soybean consumption.

The price of Burger​ King's Whopper hamburger declines. This will cause A. demand for​ McDonald's Big Mac hamburgers to increase. B. demand for​ McDonald's Big Mac hamburgers to decrease. C. a movement along the demand curve for​ McDonald's Big Mac hamburgers.

B. demand for​ McDonald's Big Mac hamburgers to decrease.

The U.S. economy enters a period of rapid growth in incomes. This will cause A. demand for​ McDonald's Big Mac hamburgers to shift to the right if they are inferior goods. B. demand for​ McDonald's Big Mac hamburgers to shift to the left if they are inferior goods. C. a movement along the demand curve for​ McDonald's Big Mac hamburgers if they are normal goods.

B. demand for​ McDonald's Big Mac hamburgers to shift to the left if they are inferior goods.

Because of​ externalities, the market for college educations will A. result in a shortage of college educations. B. provide insufficient college educations. t.C. generate too much economic surplus. D. result in a price for college educations that is inefficiently low. E. provide too many college educations.

B. provide insufficient college educations.

KFC raises price of fried chicken A. shift the demand for McDonald's Big Mac hamburgers to the left. B. shift the demand for McDonald's Big Mac hamburgers to the right. C. cause a movement along the demand curve for​ McDonald's Big Mac hamburgers.

B. shift the demand for McDonald's Big Mac hamburgers to the right.B.

Tax incidence is A. the potential division of the burden of a tax between buyers and government in a market. B. the actual division of the burden of a tax between buyers and sellers in a market. C. the potential division of the burden of a tax between buyers and sellers in a market. D. the actual division of the burden of a tax between buyers and government in a market.

B. the actual division of the burden of a tax between buyers and sellers in a market.

Suppose paper products generate a negative externality in production. If​ so, then A. the private market equilibrium results in a quantity that is less than the equilibrium price. B. the private market equilibrium results in a quantity that is greater than the efficient quantity. .C. the private market equilibrium results in a quantity that is less than the efficient quantity. D. the private market equilibrium results in a quantity of zero. E. the private market equilibrium results in a price that is equal to the efficient price

B. the private market equilibrium results in a quantity that is greater than the efficient quantity.

Goods and services that can be used for the same purpose are​ ________, and goods and services that are used together are​ ________. A. inferior​ goods; normal goods B. ​substitutes; complements C. normal​ goods; inferior goods D. ​complements; substitutes

B. ​substitutes; complements

Which of the following statements about the idea that people are rational is​ correct? A. The idea assumes that consumers and firms take into account the costs of their actions but ignore the benefits. B. The idea assumes that consumers and firms use all available information as they act to achieve their goals. C. The idea assumes that consumers and firms always make correct decisions. D. The idea assumes that consumers and firms take into account the benefits of their actions but ignore the costs.

B. The idea assumes that consumers and firms use all available information as they act to achieve their goals.

Regarding the question of whether health insurance provides people with an incentive to become​ obese, the finding of Bhattacharya and Bundorf seems A.​"off the​ wall," because​ it's common knowledge that obesity is a​ disease, like cancer. B. relevant since the link between insurance and obesity was established while holding many other variables constant. C. irrelevant since a multitude of other factors besides the presence of health insurance can cause obesity. D. irrelevant since correlation does not establish causation.

B. relevant since the link between insurance and obesity was established while holding many other variables constant.

Economists assume that people are rational in the sense that A.they generally make the correct choices. B. they use all available information as they take actions intended to achieve their goals. C. they make decisions based on​ total, rather than​ marginal, variables. D. they do not respond to economic incentives.

B. they use all available information as they take actions intended to achieve their goals.

How do property rights affect externalities and market​ failure? A. Externalities and market failure will not occur when property rights are difficult to enforce. B. Externalities will be positive and market failure will not occur when property rights are enforced. C. Externalities and market failure will result from incomplete property rights D. Externalities and market failure will result from producers having all the property rights. E. Externalities will be positive and market failure will not occur when property rights are divided equally among market participants.

C. Externalities and market failure will result from incomplete property rights

A production possibilities frontier​ (PPF) is A. a curve that shows the potential productive capabilities of the frontier​ (defined as the area outside of​ cities) of a developing economy. B. a curve that illustrates the demand of two goods for the average consumer. C. a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology. D. a curve showing the generally attainable combinations of two products that may be produced with all planned or​ potential, yet undeveloped technology.

C. a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology.

Productive efficiency means that A. a good or service is produced as quickly as possible. B. every good or service is distributed fairly. C. a good or service is produced at the lowest possible cost. D. every good or service is produced up to the point where marginal benefit is equal to marginal cost.

C. a good or service is produced at the lowest possible cost.

The burden of a carbon tax would fall disproportionately on​ low-income households because​ lower-income households spend A. a smaller fraction of their incomes. B. less. C. a larger fraction of their incomes. D. more.

C. a larger fraction of their incomes.

A Pigovian tax is A. a tax that creates an externality. B. a cost that parties incur in the process of agreeing to and carrying out an exchange of goods and services. C. a tax to bring about an efficient level of output in the presence of externalities. D. a tax to completely eliminate externalities. E. a tax that creates deadweight loss.

C. a tax to bring about an efficient level of output in the presence of externalities.

Companies that produce toilet paper bleach the paper to make it white. Some paper plants discharge the bleach into rivers and​ lakes, causing substantial environmental damage. Suppose the graph to the right illustrates the situation in the toilet paper market. By imposing a tax on toilet​ paper, the government will cause A. consumers to internalize the externality causing the equilibrium price of toilet paper consumed to stay the same. B. consumers to internalize the externality causing the equilibrium price of toilet paper consumed to decrease. C. consumers to internalize the externality causing the equilibrium quantity of toilet paper consumed to decrease. .D. consumers to internalize the externality causing the equilibrium quantity of toilet paper consumed to increase.

C. consumers to internalize the externality causing the equilibrium quantity of toilet paper consumed to decrease

Consider firms that introduce new​ products, such as DVDs in 2001. When firms introduce new​ products, how do they typically determine the price elasticity of demand for those​ products? Firms with new products often A. identify price elasticity of demand by using price controls to set price ceilings. B. identify price elasticity of demand by asking for government assistance. C. estimate price elasticity of demand by experimenting with different prices. D. guess price elasticity of demand based on market competition. E. approximate price elasticity of demand with market signals such as shortages.

C. estimate price elasticity of demand by experimenting with different prices.

The production possibilities frontier will shift outward A. if production occurs outside the production possibilities frontier. B. if resources are not used in production. C. if resources are used to produce capital goods. D. if technology declines. E. if resources are used to produce consumption goods.

C. if resources are used to produce capital goods.

Transaction costs A. may make private solutions to reduce negative externalities easier. B. do not affect private solutions to reduce negative externalities. C. may make private solutions to reduce negative externalities no longer feasible. D. may make private solutions to reduce negative externalities unnecessary. E. may provide additional incentive for private solutions to reduce negative externalities.

C. may make private solutions to reduce negative externalities no longer feasible.

When the government imposes price floors or price​ ceilings, A. everyone​ wins, goods and services distribution is more​ just, and there is an increase in economic efficiency. B. everyone​ wins, goods and services distribution is more​ just, and there is a loss of economic efficiency. C. some people​ win, some people​ lose, and there is a loss of economic efficiency. D. some people​ win, some people​ lose, and there is an increase in economic efficiency.

C. some people​ win, some people​ lose, and there is a loss of economic efficiency.

At what level must a Pigovian tax be set to achieve​ efficiency? A Pigovian tax must be set equal to A. the marginal social cost of production. B. the transaction cost associated with Coase bargaining. C. the cost of the externality. D. the market equilibrium price. E. the marginal private cost of production.

C. the cost of the externality.

Goods X and Y are perfect substitutes. When the market price of good X is​ $5/unit, firm F produces 500 units of X. When the price of Y​ rises, 100 consumers of Y shift to the consumption of good X. This causes industry analysts to believe that firm F has increased quantity supplied of X by 100 units to meet the higher demand for it. To arrive at this​ conclusion, the industry analysts are assuming that A. good X is the only substitute of Y available to them. B. each person will now buy more of X than they did prior to the increase in the price of Y. C. the new buyers of good X​ will, on​ average, consume one unit each. .D. good Y is an inferior good. E. the law of supply does not hold for good Y.

C. the new buyers of good X​ will, on​ average, consume one unit each.

The price elasticity of demand is measured as A. the percentage change in the quantity demanded divided by the percentage change in the quantity supplied. Your answer is not correct.B. the change in the quantity demanded divided by the change in price. C. the percentage change in the quantity demanded divided by the percentage change in price. .D. the quantity demanded divided by price. E. the slope of the demand curv

C. the percentage change in the quantity demanded divided by the percentage change in price.

Suppose that oil prices sharply​ increase, while more cities pass laws banning the use of plastic bags at stores.​ (Oil is an input into the production of plastic​ bags.) a. The new equilibrium price of plastic bags will A. be lower than the initial equilibrium price. B. be the same as the initial equilibrium price. C. depend on the relative shifts of demand and supply. D. be higher than the initial equilibrium price.

C. . depend on the relative shifts of demand and supply.

McDonald's distributes ​$1.00 off coupons. This will cause A. demand for​ McDonald's Big Mac hamburgers to shift to the right. B. demand for​ McDonald's Big Mac hamburgers to shift to the left. C. a movement along the demand curve for​ McDonald's Big Mac hamburgers

C. a movement along the demand curve for​ McDonald's Big Mac hamburgers

What are the sources of externalities and market​ failure? A. the difficulty of enforcing property rights in certain countries B. incomplete property rights C. a lack of understanding of the market system D. Both​ (a) and​ (b).

D. Both​ (a) and​ (b).

What does increasing marginal opportunity costs​ mean? A. Production is not occurring on the production possibilities frontier. B. Increasing the production of a good requires decreases in the production of another good. C. Increasing the production of a good requires smaller and smaller decreases in the production of another good. D. Increasing the production of a good requires larger and larger decreases in the production of another good. .E. The economy is unable to produce increasing quantities of goods and services.

D. Increasing the production of a good requires larger and larger decreases in the production of another good.

What are the implications of this idea for the shape of the production possibilities​ frontier? A. The production possibilities frontier will be bowed inward. B. The production possibilities frontier will have a positive slope. C. The production possibilities frontier will have a negative slope. D. The production possibilities frontier will be bowed outward. E. The production possibilities frontier will be a straight line.

D. The production possibilities frontier will be bowed outward.

What is the opportunity cost of spending more money to find a cure for heart​ disease? A. The reduction in future​ health-related costs of heart disease. B. The monetary value of a human life. C. The total explicit cost of the research to cure heart disease. D. The reduction in funding for research to cure other diseases. E. The cost of the​ Medicare/Medicaid program.

D. The reduction in funding for research to cure other diseases.

What is the tragedy of the​ commons? A. The tendency for firms to charge high prices. B. The tendency for the government to provide goods and services. C. The tendency for a public good to be overused. D. The tendency for a common resource to be overused. .E. The tendency for a common resource to be underprovided.

D. The tendency for a common resource to be overused.

b. The new equilibrium quantity of plastic bags will A. depend on the relative shifts of demand and supply. B. be the same as the initial equilibrium quantity of plastic bags. C. be higher than the initial equilibrium quantity of plastic bags. D. be lower than the initial equilibrium quantity of plastic bags.

D. be lower than the initial equilibrium quantity of plastic bags.

Externalities affect the economic efficiency of a market equilibrium by causing a difference between A. the private cost of production and the social cost of production. B. the private benefit of consumption and the social benefit of production. C. consumer surplus and producer surplus. D. both a and b. E. all of the above.

D. both a and b.

How can it be​ avoided? The tragedy of the commons can be avoided by A. setting a tax equal to the external cost of overusing common resources. B. clearly defining and enforcing property rights. C. removing restrictions to increase access to common resources. D. both a and b. .E. all of the above.

D. both a and b.

The parties involved in an externality have an incentive to reach an efficient solution because A. it is morally the right thing to do. B. government regulations compel private parties. C. the party that causes negative externality does not have any legal right to do so. D. both parties become better off when an efficient solution is reached.

D. both parties become better off when an efficient solution is reached.

he Coase Theorem states that A. if transaction costs are​ low, the government will regulate an efficient solution to the problem of externalities. B. if transaction costs are​ low, private markets will create externalities and result in efficient outcomes. C. if transaction costs are​ low, private deals will create externalities and result in inefficient outcomes. D. if transaction costs are​ low, private bargaining will result in an efficient solution to the problem of externalities. E. if imposed on free​ markets, government regulations will result in inefficient outcomes and create deadweight loss.

D. if transaction costs are​ low, private bargaining will result in an efficient solution to the problem of externalities

An individual producer or a consumer​ "internalizes an​ externality" when A. they lobby against any government action related to the externalities caused by their actions. B. they ignore the externalities created by their actions. C. they keep knowledge of the externalities private to them. D. in their own decisions they take into account the external effects of their actions.

D. in their own decisions they take into account the external effects of their actions.

Rivalry is the situation that occurs when A. one​ person's consumption does not interfere with another​ person's consumption. B. it is impossible to exclude others from consuming the​ good, whether they have paid for it or not. C. anyone who does not pay for a good cannot consume it. D. one​ person's consuming a unit of a good means no one else can consume it.

D. one​ person's consuming a unit of a good means no one else can consume it.

By paying college students a subsidy equal to the external benefit from a college​ education, the government will cause students to internalize the externality. That​ is, the external benefit from a college education will become a A. social benefit received by​ producers, and the supply curve for college educations will shift down. B. private benefit received by college​ students, and the demand curve for college educations will shift down. C. social benefit received by​ producers, and the supply curve for college educations will shift up. D. private benefit received by college​ students, and the demand curve for college educations will shift up.

D. private benefit received by college​ students, and the demand curve for college educations will shift up.

At what level must a Pigovian tax be set to achieve​ efficiency? A Pigovian tax must be set equal to A. the marginal social cost of production. B. the market equilibrium price. C. the marginal private cost of production. D. the cost of the externality. E. the transaction cost associated with Coase bargaining.

D. the cost of the externality.

how is free riding related to the tendency of a public good to create market​ failure? Free riding results in A. the government providing a quantity of public goods that is inefficient because they are nonexcludable and nonrival. B. the market producing a quantity of public goods that is efficient because they are nonexcludable and nonrival. C. the market producing a quantity of public goods that is inefficiently low because they are nonrival. D. the market producing a quantity of public goods that is inefficiently low because they are nonexcludable. E. the market producing a quantity of public goods that is inefficiently high because they are nonexcludable. .

D. the market producing a quantity of public goods that is inefficiently low because they are nonexcludable.

How should policymakers determine the amount of money that should be allocated for research curing heart​ disease? They should base their decision on A. the value of the total benefit of the research on heart disease. B. the number of people who have heart disease compared to the number of people who have other diseases. C. the number of people who die from heart disease compared to the number of people who die from other diseases. D. whether the last dollar devoted to research on heart disease results in more benefit than the last dollar spent on research for curing other diseases. E. the value of the total benefit of research on curing other diseases.

D. whether the last dollar devoted to research on heart disease results in more benefit than the last dollar spent on research for curing other diseases.

An unexpected frost in the orange groves of California would cause A. an increase in the demand for orange​ juice, increasing the equilibrium price. B. a decrease in the demand for orange​ juice, decreasing the equilibrium price. C. an increase in the supply of orange​ juice, decreasing the equilibrium price. D. a decrease in the supply of orange​ juice, increasing the equilibrium price.

D. a decrease in the supply of orange​ juice, increasing the equilibrium price.

A good for which demand increases as income rises is​ ________, and a good for which demand increases as income falls is​ ________. A. a​ substitute; a complement B. an inferior​ good; a normal good C. a​ complement; a substitute D. a normal​ good; an inferior good

D. a normal​ good; an inferior good

Which of the following would cause a shift in the demand curve to move out from point A to point​ B? A. A decrease in income​ (inferior good). B. An increase in the price of a substitute good. C. An increase in income​ (normal good). D. all of the above

D. all of the abvoe

Allocative efficiency means that A. a good or service is produced at the lowest possible cost. B. a good or service is produced as quickly as possible. C. every good or service is distributed fairly. D. every good or service is produced up to the point where marginal benefit is equal to marginal cost.

D. every good or service is produced up to the point where marginal benefit is equal to marginal cost.

Jay Bhattacharya and M. Kate Bundorf of Stanford University have found evidence that people who are obese and work for firms that have​ employer-provided health insurance receive lower wages than people working at those firms who are not obese. At firms that do not provide health​ insurance, obese workers do not receive lower wages than workers who are not obese. ​Source: Jay Bhattacharya and M. Kate​ Bundorf, "The Incidence of the Health Care Costs of​ Obesity," Journal of Health Economics​, Vol.​ 28, No.​ 3, May​ 2009, pp.​ 649-58. Firms that provide workers with health insurance may pay a lower wage to obese workers than to workers who are not obese because the former tend to be less healthy and consequently A. more costly to insure and therefore employ due to their higher claim submission rate. B. experience higher rates of absenteeism and early retirement. C. less productive at work. D.all of the above. E. A and B only.

D.all of the above.

A Pigovian tax is A. a tax that creates an externality. B. a cost that parties incur in the process of agreeing to and carrying out an exchange of goods and services. C. a tax to completely eliminate externalities. D. a tax that creates deadweight loss. E. a tax to bring about an efficient level of output in the presence of externalities.

E. a tax to bring about an efficient level of output in the presence of externalities.

When are we likely to see private solutions to the problem of​ externalities? A. When transaction costs are low. B. When the parties involved have information about the externality. C. When the number of parties involved is small. D. both a and b. E. all of the above.

E. all of the above.

With this increase in​ income, A. the amount by which the price of wheat falls will be larger B. the amount by which the price of wheat falls will be smaller the lower the income elasticity of wheat. C. the price of wheat will be unaffected. D. the amount by which the price of wheat rises will be smaller the higher the income elasticity of wheat. E. the amount by which the price of wheat rises will be smaller the lower the income elasticity of wheat.

E. the amount by which the price of wheat rises will be smaller the lower the income elasticity of wheat.

______ is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

At which point is the​ country's future growth rate likely to be the​ highest? Briefly explain why. A. Point Upper A because it is where resources are saved for investments. B. Point Upper B because it is where the most resources are used to produce capital goods. .C. Point Upper C because it is an efficient point where a mix of capital and consumption goods are produced. D. Point Upper D because it is where the most resources are used to produce consumption goods. E. Point Upper E because it is where the production possibilities frontier will shift with growth.

Point Upper B because it is where the most resources are used to produce capital goods.

PPF moves outward due to

advances in technology, increase in capital stock. larger labor force

Suppose a new recreational neighborhood park would cost​ $20,000, including opportunity​ costs, to construct and maintain. If​ built, the park would be a public good.... For​ simplicity, assume the neighborhood park would be used by three​ families, each of whom would derive a marginal benefit equivalent to​ $8,000 from the park. Should the neighborhood park be​ built? It would __________ (be optimal/ not be optimal) for the park to be built. If left to the private​ market, without private bargaining or government​ intervention, would the park be​ built? Without private bargaining or government​ intervention, the park ___________ be built.

be optimal; not be built if the park construction is left in private hands than park would not have been built because neither families have marginal benefit greater than marginal cost.Since each family is willing to pay maximum of $8000 but park will cost $20000 so none of the private parties will built the park.

Basis for trade is ______________ advantage

comparative

As the price of a good​ rises, producer surplus _________ ​, and as the price of a good​ falls, producer surplus _________

increases; decreases

Between 1950 and​ 2006, the price of wheat fell dramatically from​ $15.81 per bushel to​ $3.40 per bushel. Suppose between 1950 and​ 2006, the supply of wheat increased substantially due to increases in​ productivity, shifting the wheat supply curve to the right. With this supply​ shift, the amount by which the price of wheat falls will be larger the more _____________(inelastic or elastic?) the demand for wheat.

inelastic