You are studying with Tom, and he says “To maximize utility, a consumer must
consume the combination of goods so that the marginal utility of good X equals the
marginal utility of good Y.” Whether Tom’s statement is correct or incorrect?
To achieve faster growth, economies can increase income tax rates in order to increase
saving rates.
The law of diminishing returns applies is the same as the decreasing returns to scale.
During the first quarter of 2010, the US initiated an anti-dumping case against Korea
for imports of mobile phones. Dumping is when Korea sells its phones to the US at a
lower price than other producers.
In the short-run, real GDP can be greater than or less than potential GDP because in the
short run the money wage rate is fixed.
The four-firm concentration ratio equals the percentage of the value of profits
accounted for by the four largest firms in the industry.
The nation’s production possibilities frontier is bowed outward. Suppose that the
government decides to increase the production of armaments by $40 billion, and that as
a result the output of consumer goods falls by $40 billion If a further $40 billion
increase beyond the initial $40 billion increase in armaments output is sought, we can
expect that the output of consumer goods and services will fall further by $40 billion.
As more and more of the variable input is used, the total product curve increases
quickly at first because marginal product increases and then more slowly because
marginal product diminishes.
If newspaper headlines detailed an increased Taiwan interest in Japanese goods, we
would expect to observe in the market for yens “an increase in demand, a depreciation
of the yen, and a smaller number of yens traded”.
If private investment increased by $20 billion while GDP remained the same,
consumption spending decreased by $20 billion could have occurred, all else being the
same.
Your employer has asked you to start working overtime and has offered to pay $20 per
hour for every hour you work beyond forty hours a week. The wage rate for each of the
first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is
the marginal benefit of working each hour of overtime?
zero
$5.00
$15.00
$20.00.
What happens to the demand for CDs if the price of a CD player falls?
The demand for CDs decreases because the price of a substitute falls.
The demand for CDs decreases because the price of a complement falls.
The demand for CDs increases because the price of a complement falls.
The demand for CDs remains unchanged.
If minimum efficient scale is small relative to the maximum potential market,
relatively small firms will have a cost advantage over relatively large firms.
the market price will be low.
relatively large firms will have a cost advantage over relatively small firms.
the market price will be high.
Nicole Kidman considers kids to be an inferior good. As a result of kids being an
inferior good, the
substitution effect must be larger in magnitude than the income effect so that less is
purchased as the price falls.
substitution effect must be smaller in magnitude than the income effect so that less
is purchased as the price falls.
income effect is positive, so that more is purchased as income increases.
income effect is negative, so that less is purchased as income increases.
You are the new vice president in charge of advertising at Burger King. In your
upcoming advertising campaign, you plan to degrade the fast food competitor whose
product is the closest substitute for Burger King’s tacos. That would be the fast food
chain whose cross elasticity of demand with your tacos is equal to
negative 2.21.
positive 1.66.
negative 1.75.
positive 1.00.
With rain forests nearly as vast as those of Brazil or Indonesia, the nation of Equitania bas a
quarter of its 210 million acres of land in some type of forestry production. The country
produces nearly 20% of the world’s tropical hardwoods and supplies the wood for about
two million tons of paper pulp annually. All told, forestry contributes some $2 billion
annually in foreign exchange and is Equitania’s second highest export earner. In the
mid-1980s, Vermilion Paper Company of U.S. began exploring the possibility of starting a
eucalyptus plantation in Equitania to help meet the company’s growing pulp and paper
needs. However, the Forest Defense Legion-a militant U.S. environmental group-ran in
four major U.S. dailies a full-page ad entitled “398,000 ACRES OF VIRGIN RAIN
FOREST DOWN THE DRAIN” condemning Vermilion.
(Adopted from Stern, A.J. (1991). The Case of the Environmental Impasse. Harvard
Business Review, 69(3), 14-29.)
Extended Problems: The table below shows costs and benefits arising from the production
of paper
What is the efficient level of paper production? If no one owns the eucalyptus
forestry and there is no regulation of Environmental problem, what is the quantity
of paper produced per week? Draw the figure and illustrate the deadweight loss in
your figure. (5 分)
With rain forests nearly as vast as those of Brazil or Indonesia, the nation of Equitania bas a
quarter of its 210 million acres of land in some type of forestry production. The country
produces nearly 20% of the world’s tropical hardwoods and supplies the wood for about
two million tons of paper pulp annually. All told, forestry contributes some $2 billion
annually in foreign exchange and is Equitania’s second highest export earner. In the
mid-1980s, Vermilion Paper Company of U.S. began exploring the possibility of starting a
eucalyptus plantation in Equitania to help meet the company’s growing pulp and paper
needs. However, the Forest Defense Legion-a militant U.S. environmental group-ran in
four major U.S. dailies a full-page ad entitled “398,000 ACRES OF VIRGIN RAIN
FOREST DOWN THE DRAIN” condemning Vermilion.
(Adopted from Stern, A.J. (1991). The Case of the Environmental Impasse. Harvard
Business Review, 69(3), 14-29.)
Extended Problems: The table below shows costs and benefits arising from the production
of paper
If the government introduces a Pigovian tax, what is the tax per ton of paper
produced that achieves an efficient outcome? What is the amount of the tax? (5 分)
With rain forests nearly as vast as those of Brazil or Indonesia, the nation of Equitania bas a
quarter of its 210 million acres of land in some type of forestry production. The country
produces nearly 20% of the world’s tropical hardwoods and supplies the wood for about
two million tons of paper pulp annually. All told, forestry contributes some $2 billion
annually in foreign exchange and is Equitania’s second highest export earner. In the
mid-1980s, Vermilion Paper Company of U.S. began exploring the possibility of starting a
eucalyptus plantation in Equitania to help meet the company’s growing pulp and paper
needs. However, the Forest Defense Legion-a militant U.S. environmental group-ran in
four major U.S. dailies a full-page ad entitled “398,000 ACRES OF VIRGIN RAIN
FOREST DOWN THE DRAIN” condemning Vermilion.
(Adopted from Stern, A.J. (1991). The Case of the Environmental Impasse. Harvard
Business Review, 69(3), 14-29.)
Extended Problems: The table below shows costs and benefits arising from the production
of paper
If the eucalyptus landlord owns the forestry, how much paper is produced per week
and what does the Vermilion Paper company pay the landlord per ton? Explain you
answer. (5分)
With rain forests nearly as vast as those of Brazil or Indonesia, the nation of Equitania bas a
quarter of its 210 million acres of land in some type of forestry production. The country
produces nearly 20% of the world’s tropical hardwoods and supplies the wood for about
two million tons of paper pulp annually. All told, forestry contributes some $2 billion
annually in foreign exchange and is Equitania’s second highest export earner. In the
mid-1980s, Vermilion Paper Company of U.S. began exploring the possibility of starting a
eucalyptus plantation in Equitania to help meet the company’s growing pulp and paper
needs. However, the Forest Defense Legion-a militant U.S. environmental group-ran in
four major U.S. dailies a full-page ad entitled “398,000 ACRES OF VIRGIN RAIN
FOREST DOWN THE DRAIN” condemning Vermilion.
(Adopted from Stern, A.J. (1991). The Case of the Environmental Impasse. Harvard
Business Review, 69(3), 14-29.)
Extended Problems: The table below shows costs and benefits arising from the production
of paper
If the Vermilion Paper Company owns the eucalyptus forestry, how much paper is
produced per week? Explain. (5 分)
With rain forests nearly as vast as those of Brazil or Indonesia, the nation of Equitania bas a
quarter of its 210 million acres of land in some type of forestry production. The country
produces nearly 20% of the world’s tropical hardwoods and supplies the wood for about
two million tons of paper pulp annually. All told, forestry contributes some $2 billion
annually in foreign exchange and is Equitania’s second highest export earner. In the
mid-1980s, Vermilion Paper Company of U.S. began exploring the possibility of starting a
eucalyptus plantation in Equitania to help meet the company’s growing pulp and paper
needs. However, the Forest Defense Legion-a militant U.S. environmental group-ran in
four major U.S. dailies a full-page ad entitled “398,000 ACRES OF VIRGIN RAIN
FOREST DOWN THE DRAIN” condemning Vermilion.
(Adopted from Stern, A.J. (1991). The Case of the Environmental Impasse. Harvard
Business Review, 69(3), 14-29.)
Extended Problems: The table below shows costs and benefits arising from the production
of paper
Compare the quantities of paper produced 3 and 4 and explain the relationship
between these quantities. (5 分)
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